Environment: Litter and Waste
	 — 
	Question

Baroness Gardner of Parkes: To ask Her Majesty's Government whether they will establish recommended standards for dealing with litter and waste, adapted for different areas and needs and including labelling plastic carrier bags with the length of time they take to biodegrade.

Lord Henley: My Lords, the Code of practice on litter and refuse sets cleaning standards for local authorities which vary according to an area's intensity of use and litter levels. The key to reducing the environmental cost of carrier bags is reducing usage, encouraging reuse and recycling. It is unclear whether labelling carrier bags with details of biodegradability influences consumer behaviour. It might wrongly imply that quicker-degrading bags have less environmental impact.

Baroness Gardner of Parkes: I thank the Minister for that slightly doubtful Answer. Has he become aware, or does he know, that the chemical additive d2w, in use since 1970, has now been developed to a degree of accuracy that almost the exact date of self-destruction can be built into plastic-bag manufacture? Would it not be an advantage for everyone to know this death date so that bags could be tailored for certain markets, such as the fast-food industry-blamed for bags clogging our waterways? Other bags intended for long-term storage would not unexpectedly turn into confetti. Is the Minister aware that some people are now beginning to hoard free plastic carriers because they are so fearful that they may become unavailable?

Lord Henley: My Lords, I was aware of the brief chemistry lesson that my noble friend has given me but I am grateful for that. Labelling plastic bags is not quite as simple as that. Some bags break down in different manners in different environments, according to where they are left, whether it is in the sea or on land. Some will break down into different things, whether plastic or, if they are made of some organic matter, in other ways. All things break down in different ways and labelling would not necessarily help the consumer. I am always prepared to listen to any further advice that my noble friend and others have on these matters. We want to deal with the long-term problem particularly of the single-use plastic bag.

Baroness Finlay of Llandaff: My Lords, are the Government giving consideration to the decision taken by the Welsh Government to charge for plastic bags from 1 October, to encourage the reuse of bags and of good old-fashioned shopping bags?

Lord Henley: My Lords, I have not always been the greatest fan of devolution but one of its great advantages is that we can profit from lessons learnt in other countries. We will certainly look carefully at what they are doing in Wales and keep an eye on that. The noble Baroness is quite right to talk about what she referred to as "good, old-fashioned shopping bags" or the bags made available by supermarkets at a cost to encourage reuse of them. Often the problem with those is that one ends up buying too many. I have a very large stack of those bags at home waiting to be reused.

Lord McConnell of Glenscorrodale: My Lords, are the Government aware of the example of Rwanda, where the Parliament and Government banned the use of plastic bags completely, leading to it being widely described as the cleanest country in the whole of Africa? The impact on litter pollution and also civic duty in Rwanda has been considerable. Will the Government look at international examples to deal with this horrendous problem?

Lord Henley: My Lords, I am very grateful to the noble Lord for bringing to the House the experiences of Rwanda. I recently met the Rwandan forestry minister on a completely different matter and unfortunately, because I was not briefed on this matter, did not have a chance to discuss it with him. Should I have a chance again, I will do so. That is an option that one could look at. We are not happy that the decline in the use of single-use plastic bags has not been maintained and that there has been an increase. When we got those figures in the summer, I made it clear that, if we do not see an improvement, we may have to consider additional measures in the future, and we will certainly learn from all other countries.

Baroness Eaton: Would the Government consider having their experts look at drawing up a recommended list of materials for recycling, which could be very helpful both to local government and to individuals?

Lord Henley: My noble friend is quite right to draw to the House's attention the problems of the vast variety of different plastics that we use-I cannot remember how many there are-and the problems of recycling them. I think that currently we recycle some 24 per cent of packaging. We would like to get that figure up. Obviously it might be easier to do that if we could reduce the number of different forms of plastic, but that would take quite a long time, a great many behavioural changes and changes by the producers. Certainly, as my noble friend suggests, it is something that we could look at.

Lord Knight of Weymouth: My Lords, the Government's waste review set out the noble ambition of a zero-waste economy. I ask the Minister, what role do standards and targets have in achieving that? The previous Government legislated to take powers to tackle the profusion of plastic bags, and we have heard how such powers are being used by the Welsh Assembly Government. Wales also has a recycling target of 70 per cent. Is this Government's lack of action connected to the abandoning of any recycling targets in England?

Lord Henley: I am not always convinced that targets are necessarily the right way to go forward. Targets can very often distort behaviour and distort priorities and how people deal with things. We made clear in our waste review that we want to make it easy for individuals and organisations to do the right thing, because a great many of them want to do just that. We will continue that process, and I hope that as a result we will head towards that zero-waste economy that we are looking for.

Lord Greaves: My Lords, would my noble friend agree that, in the general area of litter and waste, and indeed offensive graffiti, localism really should reign and prevail? It is not up to central government to tell local people and local councils exactly what they should do and how they should do it. It is up to local people and local councillors to get together to make sure that their streets and areas are clean and that unsightly graffiti are removed. Would he agree that it would be wrong for the Government to take away any of the existing powers that local authorities have in this area?

Lord Henley: My noble friend is quite right to link graffiti with both litter and waste, and I am very grateful that he did that. I am also grateful for his stress on the importance of localism. I have made it clear the whole way through this process, particularly when it came to our recent waste review, that we believe that it is for local authorities to decide on these matters and that they can get them right. What is right in one borough, such as Westminster, where I happen to live, or Carlisle, where I also happen to live, will be different processes. The same will be true for Pendle, where my noble friend lives.

Lord Grenfell: Would it not be possible to reduce the use of plastic bags if more could be done to encourage the producers and manufacturers of goods that are sold in supermarkets to stop packaging them as if they were mothballing an aircraft carrier?

Lord Henley: Again, it is not as simple as all that. We do encourage them to reduce packaging as much as possible. However, the noble Lord will find that some packaging actually does end up reducing waste. If one takes something as simple as a cucumber, wrapping it in plastic ends up reducing the amount of cucumber that is wasted because it goes off compared to the cucumber that is unwrapped. This is a simple fact. So packaging can play its part in reducing waste, and we will work with the supermarkets and others to make sure that, while packaging is reduced, packaging can also play its part in reducing waste.

Sellafield
	 — 
	Question

Baroness Worthington: To ask Her Majesty's Government, in view of the recently announced closure of the MOX reprocessing plant at Sellafield, what plans they have for securing investment and new jobs in the local area.

Baroness Wilcox: Sellafield is recognised as the most important nuclear site in the UK, employing over 10,000 people. That priority has seen record levels of investment from the latest government spending round, which will lead to the acceleration of decommissioning work at the site. The closure of the MOX plant is of course regrettable, but Sellafield Ltd is actively working with the 600 people who will lose their jobs at this time, and everyone in the area is doing their very best to see that these people find jobs very quickly.

Baroness Worthington: My Lords, I am grateful to the Minister for her Answer and it is welcome that new jobs are being sought. However, my Question leads to the longer-term future for the site. Sellafield is a unique site in the UK and I believe that it could become the home of world-leading research into the use of next-generation nuclear reactors. Such reactors, as well as being more efficient in their fuel use, generating no long-lasting waste, can be designed to burn up existing stockpiles of plutonium held at the Sellafield site. In light of this, is there more that the Government can do to support R&D into new nuclear designs that will help to ensure that we develop the safest and most efficient new reactors?

Baroness Wilcox: First, I welcome the noble Baroness, Lady Worthington, and her new interest in nuclear, and I hope that she will feed in her views to the Government and allow us to help her where we can. I hope that she will share her vision of the new approach, which I think she was hoping would be based on thorium. On her Question, if we can turn a liability into an asset, this Government will explore every possibility. The Government consulted earlier this year on their preferred policy option for dealing with the plutonium stockpile, and will confirm their position later this year.

Lord Winston: My Lords, does the Minister not regard it as a crying shame that this country, which after all pretty well started the invention of nuclear power for peaceful uses, is now annually investing less than £25 million a year in research into nuclear fission, which is way behind all our major competitors? That makes us the poorhouse for developing further in the way that my noble friend has just mentioned.

Baroness Wilcox: The noble Lord, Lord Winston, is right that we have not been investing as we should. We have been in government for only a year and we are trying our best to get ahead as fast as we can. I know that he is doing wonderful work with Imperial College, and it is to people like him that we look to show us the way ahead.

Lord Razzall: Following on from the Question from the noble Baroness, Lady Worthington, rather than jumping the gun like Usain Bolt, may I ask my noble friend whether there are residual liabilities under the processing contracts at the MOX plant at Sellafield in relation to cleaning up the plant? If so, who is going to bear them?

Baroness Wilcox: There are residual liabilities, and we will have to work out exactly what we are going to do. Can we turn the existing plutonium stocks from the MOX plants from a liability into an asset? That is an area that we must look at and see what we can do. The Government consulted earlier this year on their preferred policy option for dealing with all those stockpiles and will confirm their position later this year. I thank my noble friend for his question.

Lord Taverne: My Lords, in dealing with the future of nuclear sights, will the Government draw the public's attention to the fact that most fears about radiation are enormously exaggerated?

Baroness Wilcox: I fully agree with my noble friend's statement.

Lord Grantchester: Does the Minister agree that there would be great benefit to the area and the UK if the existing plutonium stock stored at Sellafield could be converted into an asset? With the right kind of advanced reactor, the plutonium could be completely consumed while making new fuel from thorium, which could be used in increasing carbon-free electrical generation capacity, generating 20 per cent more than the UK is currently using. Could the Minister confirm that this would be of huge benefit to jobs in Cumbria?

Baroness Wilcox: It would be of huge benefit to everyone if we can get this off the ground, absolutely. I really am very grateful, as is my noble friend Lord Marland, for the noble Lord's personal interest in this subject. I understand that he is going to Sellafield soon and we would very much like to hear his views on his return.

Baroness Wall of New Barnet: Will the noble Baroness and the Government do all that they can to encourage the creation of new jobs in these areas, as my noble friend has suggested in her Question? Will she also confirm that the number of apprentices already at Sellafield is the way forward in creating those new jobs and building a future for that area?

Baroness Wilcox: I agree with the noble Baroness, particularly about apprenticeships, which I know are very close to her heart. UK Trade and Investment is looking at this area and seeing what it can do to help, the Cumbria Local Enterprise Partnership is working extremely well, the docks at Warrington have been opened for the new containers, and a lot of apprenticeships are, I understand, being sought in that area. So yes, I do agree with her.

NHS: Medical Records
	 — 
	Question

Lord Naseby: To ask Her Majesty's Government whether they intend to continue to computerise all NHS medical records.

Earl Howe: My Lords, the Government aim to continue to computerise NHS medical records so that patient experience is enhanced, patient care is made more efficient, and patient safety is improved. However, we recognise the weakness of top-down, centrally imposed IT systems. Although elements of the programme have been successful, the policy approach taken has failed to engage the NHS sufficiently. The findings of recent reviews will contribute to planning currently under way for future informatics support to the modernised NHS.

Lord Naseby: Is my noble friend aware that the current programme for the NHS database has cost over £6.2 billion, has taken 10 years and is currently totally unworkable? Is he aware of any other country in the world that has attempted such a project and succeeded? As far as I can see, no other country has even attempted it. Would it not be far better if Her Majesty's Government bit the bullet and scrapped the whole scheme, as they did with the RAF's Nimrod programme, which was itself a brave decision?

Earl Howe: My Lords, I can well understand my noble friend's acute disquiet over this matter, particularly in light of the recent report from the Public Accounts Committee. The view we have taken is that some very good things have been achieved so far, particularly from the national elements of the programme, but it is equally clear that the top-down policy approach taken to the computerisation of the NHS has not delivered the benefits at local level that everybody was hoping for and has failed to engage the NHS sufficiently. Those are the things we are now concentrating on: making sure that the governance of the programme is sound; learning lessons from what has happened; and achieving value for money.

Lord Warner: My Lords, I declare an interest as the former Minister responsible for this programme-one does have to own up to one's past from time to time. Could the Minister assure the House that the Government are fully committed to the idea of an electronic patient record system as the way forward for the NHS, given its benefits for patient care, research and NHS efficiency? Could he tell the House what proportion of the population has now been able to avail itself of an electronic summary record?

Earl Howe: I pay tribute to the work that the noble Lord did when he was a Minister. Yes, the Government are committed to a summary care record, which, for the benefit of noble Lords, is a record that includes a defined set of key patient data, other than for patients who choose to opt out-that is an important rider. Clinicians can then access essential medical information that they need to support safe treatment and to reduce the risk of inadvertent harm, especially during emergency care. To answer the second question that the noble Lord asked, over six million patients now have a summary care record, which is a considerable increase over a few months ago.

Lord Patel: My Lords, would the Minister agree that to improve the quality of healthcare we would need comparable indicators of health outcomes? In the absence of nationally collected computerised data, how would we achieve this?

Earl Howe: My Lords, the noble Lord is absolutely right. We have to measure performance in order to improve upon it. That is why we are focused on producing an information strategy, which we hope to publish later this year. A lot of work has already gone on and the NHS Future Forum, as he may know, is looking at this area. He is absolutely right that this will be central to the performance management of the NHS.

Baroness Jolly: My Lords, we are now well into the 21st century. Can the Minister give us some indication as to when patients might be able to access their own records online?

Earl Howe: This is a commitment that we have made. We fully support the concept of patients having full access to their medical records online. A great deal of work is going on at the moment to make sure that the protocols are sound, because clearly the one thing one does not want is for the wrong people to access the wrong patient data. If we can achieve that and do it in a simple way, we shall roll the programme out as soon as we can.

Baroness Pitkeathley: I take on board what the noble Earl says about engaging local commitment and the failure that there has been in that so far, but does he agree that one of the most important things about local commitment is that different localities may have different systems? As far as the patient is concerned, it is absolutely essential that the systems can talk to each other. How will that be ensured if we go down the local route?

Earl Howe: The noble Baroness makes a very good point. I said that the top-down approach to local service provision has not worked when it has come to local service provider systems. We think that local requirements are best judged and best met by decisions being taken locally but that does not mean that they will be left on their own. There will be the necessary support from the centre wherever needed. She is again right that the key will be that these local systems must be interoperable.

The Countess of Mar: My Lords-

Lord Maginnis of Drumglass: My Lords-

The Countess of Mar: My Lords, does the Minister agree that while technology is incredibly beneficial to the National Health Service, we must be wary of people working within the health service depending too much upon technology and ignoring the human aspects of care for people who are in hospital-talking to patients, touching them and holding their hands when they have problems? My recent experiences in hospital have been very unpleasant because people have relied entirely on technology and not listened to what I have had to say.

Earl Howe: The noble Countess is of course correct that good patient care is about humane and sensitive treatment by the staff who serve in the National Health Service. At the same time, I think we are all clear that technology has a role to play in enhancing patient safety and improving the quality of care that the good staff of the NHS can deliver.

Baroness Thornton: My Lords, can I entice the Minister into being slightly more definite about when the House might see the new IT strategy which the Government keep telling us that they are about to publish? As a former Minister, I know that the answer "soon" is one that the House always looks at with some wry smiles. If we could have a more definite date, that might be helpful.

Earl Howe: My Lords, we plan to make an announcement towards the latter part of the autumn about the way forward for informatics, which will mean-we are clear about this-that we continue to gain more value for money from taxpayers' investment and ensure that informatics support is fit for purpose in the modern NHS.

Prisoners: Sanitation
	 — 
	Question

Lord Ramsbotham: To ask Her Majesty's Government what action they are taking to speed up the ending of "slopping out" in prisons in England and Wales.

Lord McNally: My Lords, the use of slopping out as the primary method of prisoner sanitation ended in 1996. Currently, less than 3 per cent of the prison population are required to use unacceptable alternatives to in-cell sanitation. All new build has in-cell sanitation and, in some cases, in-cell showering facilities.

Lord Ramsbotham: My Lords, I thank the Minister for that reply. In September 1991, the then Home Secretary, the noble Lord, Lord Baker of Dorking, assured everyone, at paragraph 6.8 of his White Paper Custody, Care and Justice, that,
	"no prisoner will have to endure the inhumane and degrading practice of slopping out after the end of 1994".
	The announcement made by the Prisons Minister Ann Widdecombe in 1996, which the Minister quoted, was premature because there have been, and are, cases of slopping out. The Scottish Prisons Service has admitted that the practice breaches human rights. Recently, the Scottish Court of Session has agreed that prisoners can sue for damages for being made to slop out. Might the prospect of literally thousands of British prisoners taking the same route encourage the Government to fulfil the assurance given 20 years ago that slopping out would end 15 years ago?

Lord McNally: No, my Lords. The figures I have given are accurate: less than 3 per cent of prisoners have facilities that do not comprise in-cell sanitation. The main alternative is electronic unlocking, which is not a perfect system but is certainly not degrading in the terms that the noble Lord suggested. As far as we are concerned, it is compliant with humanitarian and human rights legislation. The truth is that we have a prison estate in which it is extremely difficult to meet the full commitment to in-cell sanitation. Therefore, I cannot be enthusiastic at present about promising a rapid reduction in the numbers. As I say, as new build comes on stream, there will be more in-cell sanitation, but that will not happen quickly. We are down to almost an irreducible minimum whereby electronic unlocking is the alternative to in-cell sanitation.

Baroness Linklater of Butterstone: My Lords, given the Scottish experience, what provision is being made in England and Wales to prevent a similar situation developing here, where, in round numbers, 1,973 prison places are still affected by this disgusting situation?

Lord McNally: It is not helpful to suggest that it is disgusting to ring a bell to open the cell door in order to use the toilet. As my noble friend said, that applies to fewer than 2,000 prisoners in a prison estate of nearly 88,000. They have to do that because in certain prisons it is physically impossible to put in the facilities that would be desirable.

Baroness Howe of Idlicote: The independent monitoring board makes no mention of women. Will the Minister confirm that this grossly offensive practice-I stress those words-of slopping out does not apply in women's prisons? If that is so, does not equal treatment mean that this should be an equally unacceptable practice in all men's prisons?

Lord McNally: It is an unacceptable practice. I understand that the only time people are asked to use a removable bucket to slop out is if there is a breakdown in the system. I am assured that in no part of the prison estate do women have facilities other than in-cell facilities.

Baroness Knight of Collingtree: My Lords, could we be told who has to do this job, when it is necessary for it to be done, if prisoners do not do it?

Lord McNally: I am told that when it is necessary to carry out some slopping out it is done by a unit of prisoners. Individuals are not asked to slop out but, as happens in many prisons, it is part of the cleaning or other duties that a group is asked to do. It is done by prisoners. But I again emphasise that where there is in-cell provision and electronic provision, slopping out will take place only when there is a mechanical breakdown of one or other of the systems. When that happens I am told that most prisons use a cleaning squad of prisoners to carry out that job.

The Earl of Listowel: My Lords, does the Minister agree that reducing the prison population would be one way of tackling this problem? Reducing the adult prison population would be helpful in addressing this problem. Will he consider the success of the Youth Justice Board which, in the past three years, while the adult prison population has increased, has decreased the child prison population by 30 per cent? Rather than abolishing the Youth Justice Board, will he consider whether that model of governance might be applied to the adult estate?

Lord McNally: We will have learnt a lot that is beneficial from the role of the Youth Justice Board. Indeed, we will take those lessons to the Ministry of Justice and continue to work along those lines with the youth system. The noble Earl is right and that is why my right honourable friend the Lord Chancellor has drawn attention to the central part in government policy of our programme of rehabilitation. We have far too many of the wrong people within our prison system. If we could reduce prison numbers it would be a win-win situation for taxpayers and a way of getting more civilised accommodation within the prison estate.

Arrangement of Business

Baroness Meacher: My Lords, on a point of order on the coming business of the House, may I make a plea on behalf of the House for the Chief Whip to review the date of the Second Reading of the Health and Social Care Bill, which has now been scheduled to take place at the time of the Tory party conference, during a week when many Peers do not expect to be present?

Baroness Anelay of St Johns: My Lords, we do not have points of order in this House, but it may be helpful if I remind the House that the dates for such matters are agreed in the usual channels, and these were readily agreed by both the noble Baroness, Lady Thornton, and the opposition Chief Whip, the noble Lord, Lord Bassam. Of course, as ever, I can improve that-as I see that there seems to be some unusual reaction opposite, including from the noble Baroness, Lady Thornton. I suggest that these matters continue to be discussed in the usual channels.

Lord Bassam of Brighton: My Lords, the Chief Whip has made the correct point in concluding her remarks that we should continue discussions in the usual channels. I rather confess to being the junior partner in these discussions but clearly we need to be flexible. I am more than prepared to be part of a flexible discussion when it comes to discussing days for parliamentary business to be conducted in your Lordships' House.

Baroness Williams of Crosby: My Lords, is it not reasonable that, for those of us who are anxious to take part in the business of the House, not least on this central and crucial Bill, we are entitled to express our views to the Chief Whip? We ask her to take into account the very substantial problems that many of us in this House are having with the rather late notice on the change of dates, which means that people who have a good deal to contribute will find it almost impossible to do so. It is not unreasonable that when the usual channels take their usual course, they take some notice of the position of other Members of this House.

Baroness Thornton: My Lords, since I have been mentioned in this regard, perhaps I may say that I am only trying to be helpful. When asked if I would be available on 4 October, the truthful answer was that I would be-but I am also available on three days of the following week. I am prepared to be entirely flexible and put myself in the hands of the usual channels on this matter.

Lord Strathclyde: My Lords, I am loath to involve myself in this, but the House needs to get itself back into order. There are good ways of settling this. I should perhaps add that it is impossible to suit every Peer unless the Chief Whips have a copy of every Peer's diary for the course of the next few weeks. That is simply not practical. I hope now that we can continue with the business of the House.

Information Committee
	 — 
	Membership Motion

Moved by The Chairman of Committees
	That Baroness Stedman-Scott be appointed a member of the Information Committee in place of Viscount Bridgeman, resigned.
	Motion agreed.

Localism Bill

Bill Main Page

Report (2nd Day)

Clause 155 : Settlement payments
	Amendment 39
	 Moved by Lord McKenzie of Luton
	39: Clause 155, page 149, line 5, leave out ", or is likely to be,"

Lord McKenzie of Luton: My Lords, I shall speak also to Amendments 43 and 45. Clause 155 introduces the concept of settlement payments to facilitate the self-financing system that will replace the housing subsidy system when it is abolished. A devolved system of council housing, whereby councils are able to manage their stock using their own rents, will be achieved by a one-off debt settlement. We discussed this on Monday. The amount of debt allocated to each authority will be calculated on the basis of what its business plan shows it is able to support. The 30-year cash flow of income and expenditure is converted to a capital valuation using standard discounting techniques. If the valuation is below the amount of housing debt for which an authority currently gets support through the subsidy system, the Government will make a settlement payment. If the valuation is higher, the local housing authority will make a settlement payment.
	The cash flows for the 30-year business plan will require the forecasting of rental income and of costs for repairing and maintaining stock, as well as debt servicing costs. Clause 155 gives the Secretary of State the authority to make determinations for providing the basis of calculation of the settlement payments. It covers the right to make assumptions about receipts and payments. Any determination can include an assumption even if it is not borne out by events. Further, it can include an assumption whether or not it is likely to be borne out. The amendment seeks clarification of this phrase. Does that mean that at the point when the assumption is made, it does not matter whether it is likely to be borne out? This probe is not just nitpicking; it is important to be clear on the evidence and analysis that will be needed to underpin the assumptions that will be used. These are the sorts of issues on which my noble friend Lord Whitty sought clarification when we last debated this.
	I will take one example of an unrealistic assumption. It is understood that the calculation assumes that the initial year's income is available to offset the cost of the self-financing payment at the start of the year, whereas in practice it will accrue throughout the year. Similarly, the loss of rental income from right-to-buy sales is assumed to operate only from the end of each financial year. This is demonstrably unrealistic and operates against the interests of local housing authorities.
	There are also, as I understand it, issues about demolitions. To the extent to which they are recognised, they obviously reduce income in the 30-year plan. However, it is understood that they are only recognised if a degree of actual planning for them has occurred or is under way. Clearly, over a 30-year period, this will not always be the case initially. What is the current position on this? I do not expect an answer to the technical points here and now; but, if correct, they support the proposition that some unrealistic assumptions are built into the calculations operating to the detriment of local housing authorities. What is the process of resolving these?
	Amendment 43 focuses on Clause 157 and relates to settlement payments arising from the abolition of the housing revenue account subsidy scheme. Clause 157 covers certain aspects of settlement payments. In particular, it allows the Secretary of State to charge local housing authorities interest, if they pay late, an amount equal to any additional cost that the Government incur. This amendment simply provides for reciprocity should the Secretary of State not pay at the time determined. It may be considered that the Government will never default on a payment or, indeed, on a payment timetable, but we could be dealing with circumstances were there is administrative error or, indeed, an IT problem. As the sums involved could well be significant, it seems entirely reasonable that local housing authorities should be kept whole.
	Finally, on Amendment 45, we originally added our name to this amendment which I think was tabled by the noble Lord, Lord Best, together with a small amendment. I am not sure why the noble Lord did not wish to pursue his amendment, and he may let us know. However, I am pleased to see that we continue to have common cause with the noble Lord in wishing to remove Clause 158 from the Bill. This is the essence of what we are dealing with. In place of Clause 158, our amendment would cause local authorities to determine and keep under review their level of housing debt consistent with their obligations under the Local Government Act 2003. As we discussed on Monday, Clause 158, in particular, provides for the Secretary of State to be able to impose limits on council housing borrowing. We agree with the LGA that this power contravenes the objective and spirit of self-financing.
	I am grateful to the Minister for her letter of 9 August. However, when she commented on this matter, she argued that the power for central government to control the overall HRA borrowing is essential to protect the Government's fiscal priority of reducing the deficit, and that self-financing gives local authorities direct control over a large income stream-indeed, that is its purpose. She wrote:
	"Your amendment proposed at Committee stage would have left the decision as to what constitutes 'affordable borrowing' to individual local authorities to determine, with central government only having the ability to issue guidance on this issue".
	Why is the existing prudential regime not considered sufficient to cover the situation? It has worked effectively, and effectively to protect the Government. In any event, why is the protection of the Local Government Act 2003-in particular the provisions in Sections 3 and 4(1) and (2)-not sufficient? To date, the Government seem to have focused on Section 3 of the 2003 Act, not Section 4. Let me try again to draw attention to that, because I believe that it is crucial to this argument.
	Section 4(1) of the 2003 Act states:
	"The Secretary of State may for national economic reasons by regulations set limits in relation to the borrowing of money by local authorities".
	Moreover, subsection (2) states:
	"The Secretary of State may by direction set limits in relation to the borrowing of money by a particular local authority for the purpose of ensuring that the authority does not borrow more than it can afford".
	We accept that, for national economic reasons, the Government should have the residual power to limit local authority borrowing. That was, after all, our legislation. But the Government should not be allowed to hide behind these powers to diminish the benefits of self-financing. On Monday we focused on the fact that the Government have already removed vital headroom from local authorities by charging a reduced discount rate. The capping of opening debt levels just reinforces this disadvantage. We need a better explanation from the Government on this point than we have hitherto received.
	I do not propose to press Amendments 39 and 43 today. However, I reserve the right to test the view of the House when Amendment 45 is called, in the event that we do not receive a coherent and satisfactory answer on this very important point.

Lord Shutt of Greetland: My Lords, I thank the noble Lord, Lord McKenzie, for moving his amendments, the first of which is Amendment 39. Clause 155 provides a power for central government to make determinations providing for the calculation of a settlement payment in relation to every council that retains its own housing stock. This payment is a mechanism for adjusting each council's housing debt to a level which it can sustain after meeting the costs of managing and maintaining its stock. It will leave every council in a position to finance its own housing stock from its own rental income without need for subsidy. The clause sets out that these determinations may be calculated according to a formula, and that this formula may include variables relating to income, expenditure needs and levels of existing housing debt.
	The methodology that we will use to calculate these settlement payments has been extensively tested and refined with local authorities through two public consultations. It has also been the product of joint working with local authorities and others working in the sector. Subsequent to these consultations, we have issued two detailed policy documents this year confirming our intentions to make full reforms based on the key principles set out in these consultations. These policy documents include the models we will use to value the stock and working drafts of the determinations that we will issue. We will publish a further consultation in November on the final proposals, when we have the latest data.
	It is therefore fair to say that this policy has been subject to unusually high levels of public scrutiny and debate. In valuing the business, the expenditure needs are rooted in unit costs identified in independent research which was itself published for consultation. The income assumed is that set out in the Government's national social rent policy. The settlement payments will reflect the difference between the value of each housing business and its existing housing debt. Where the debt is greater than the valuation, the Government will pay the difference to the council. Where the valuation is higher than the debt, the council will pay the difference to the Government.
	The amendment which the noble Lord seeks would remove a degree of discretion available to the Secretary of State in setting the assumptions upon which the determinations will be based. This is unnecessary, as the assumptions will be based on the best information available at the time and have been extensively tested and consulted on. In addition, the determination setting out each settlement payment will be subject to a further consultation this autumn, during which councils will be able to correct any errors. Therefore I trust that this amendment will not be pressed.
	On Amendment 43, Clause 157 sets out the practical provisions under which settlement payments should be made. It gives a reserve power to the Secretary of State to charge interest or recoup costs incurred if councils make their settlement payments after the time specified in the determination. I have described these as reserve powers as we do not expect to use them due to the excellent track records councils have in meeting their financial obligations. The noble Lord's amendment would establish reciprocal arrangements whereby the Secretary of State would make additional payments where any sum payable by the Secretary of State to particular local authorities was not paid on time. I can assure you that the Government will make its payments to local authorities on time.
	That sounds grand, so I thought I would check it out a bit further. Presently housing revenue account subsidy is paid in 10 instalments in the year, and is paid on time. When councils receive regular revenue support grant, it is paid and it is paid on time. On the rare occasions, for some technical reason, it has not happened on time, the Government have voluntarily paid compensation. The determination setting out the payment date will be issued by the Government and detailed arrangements for the day have already been set out by the Department for Communities and Local Government in the policy document Self-financing: Planning the Transition, which was issued this July. Therefore, I do not believe that this amendment is necessary, and I trust it will not be pressed.
	On Amendment 45, we had some discussion on these areas on Monday and we already debated the power we are taking to set a cap on housing debt as part of our reforms. As I noted previously, Clause 158 is not a minor or technical part of these reforms, it is integral to protecting the Government's central fiscal priority-to bring public borrowing under control. I understand that many councils do not want a centrally imposed limit on their ability to borrow for housing, but our reforms must not risk undermining national fiscal policy on public debt. Self-financing will give local authorities direct control over a rent income stream of around £6 billion a year. This could potentially be used to finance a large increase in public sector debt. It is not possible to say confidently how many councils might choose to borrow more but we know that councils will start out under self-financing with much less debt per dwelling than housing associations with similar costs and incomes. It is just not possible to take the risk that this deal might drive a big increase in public sector debt.
	Noble Lords have asked why the prudential borrowing rules are not sufficient to protect against this. The prudential borrowing rules have worked very well but, as I said previously, our concern is not that local authorities will act in ways that are imprudent locally, it is that in aggregate these borrowing decisions may be unaffordable nationally. The amendment tabled by the noble Lord would remove this specific cap on housing borrowing and replace it with a power for the Secretary of State to issue guidance or regulations under the Local Government Act 2003. The Act does include powers to cap the debt of individual local authorities, but these are,
	"for the purpose of ensuring that the authority does not borrow more than it can afford".
	As I have said, our concern is not that a council would borrow more than it can afford, it is that in aggregate councils may borrow more than the country can afford. The bespoke powers we are taking ensure that this cap will only apply to housing debt and not any other borrowing by local authorities. Indeed, I have some sympathy with the intentions but I have to resist the amendment and I trust that this will not be pressed.

Lord McKenzie of Luton: My Lords, I thank the Minister for his very detailed, if predictable, reply. In relation to Amendment 45, I honestly do not think that he has reasonably addressed that point about the power that already exists with the Secretary of State being able, for national economic reasons-which is why he wants it in this clause-to set limits in relation to the borrowing of money by local authorities. That power is there. Why is an additional power needed? I do not think that the noble Lord has dealt sufficiently with that point.
	As regards Amendment 43, as I understand it the proposition is that should the Government be late with their payments for technical or any other reasons, as has happened albeit infrequently in the past, they will make a voluntary payment. Is that on the record and what we are dealing with here? The amendment simply seeks to enshrine that formally in legislation. But, as I have said, I will not push that point if the noble Lord is putting on the record that in those circumstances the Government anticipate keeping local authorities whole.

Lord Shutt of Greetland: That would be the anticipation but the idea is that the Government pay on the dot at the appropriate time.

Lord McKenzie of Luton: Of course it is. One would hope that they do and I accept that overwhelmingly they have, under the current subsidy system. But it is good to have that clearly on the record.
	As to Amendment 39, I recognise and understand that there has been extensive consultation around these important provisions and that there is more to come. I was seeking to get a better view on the extent to which there may still be disagreement challenges over the technical aspects of how the settlements are proposed. What is the process for settling that? Consultation is all very well but it is a question of how the Government respond to that if there are at least residual challenges about those calculations. As I have said, I do not propose to press Amendment 39. We will see where those future consultations and discussions lead us. I made my point in relation to Amendment 43 and we have something on the record.
	I am inclined not to push Amendment 45 today, although I urge the Minister to give us a better explanation of why proposed new subsection (4) is not sufficient to cover what the Government seek to achieve. Without that, I give no guarantee that I will not seek to bring that point back at Third Reading.
	Amendment 39 withdrawn.
	Amendment 40 not moved.
	Amendment 41
	 Moved by Lord Best
	41: After Clause 155, insert the following new Clause-
	"Proceeds of sale of social housing
	(1) In section 11 of the Local Government Act 2003 (duty to determine affordable borrowing limit), omit subsections (2)(b), (3) and (4).
	(2) Any regulation made under section 11(2)(b) of the Local Government Act 2003 shall cease to have effect from 1 April 2012."

Lord Best: My Lords, Amendments 41 and 51 are also about local authorities having greater freedom to organise their housing affairs without constant barriers being put in their way. These amendments concern the restrictions on local authorities that flow from taxing the sales of right-to-buy properties or any other sales of properties by housing authorities at 75 per cent of the money received by the local authority. Housing associations can sell properties, whether under the right to buy that they operate or on the open market where they have a vacant property. They can recycle 100 per cent of their receipts back into housing, to improving their housing stock and to building new homes.
	The housing association of which I used to be chief executive, the Joseph Rowntree Housing Trust, had a programme of selling alternative vacant properties on our estates so that we could get a better mix of people of different incomes living in the same community. We could replace every home that we sold because we received 100 per cent of the funds from that sale to recycle into new homes elsewhere. However, local authorities have to pay 75 per cent of their proceeds back to the Treasury. Now that we are in the mode of reforming the housing revenue account, this seems to be the moment at which that restriction should be lifted and local authorities should be liberated to recycle the proceeds from sales.
	I understand that the Treasury is very reluctant to forgo the receipts that it currently collects. That perhaps is understandable, because this is serious money that is coming into the Treasury. It has managed to scoop the pool here for many years, and tens of billions of pounds from right-to-buy sales have gone into the Exchequer. I understand that it does not wish to say goodbye to those arrangements. I also understand that in settling the debt in the new self-financing scheme for local authorities, account has been taken of the rental income that people will forgo once a property is sold. Nevertheless, saying goodbye to 75 per cent of the proceeds from right-to-buy sales, in stark contrast with the way housing associations are treated, seems to be an item on which reform at this time would be very significant.
	Let me make it clear that it is not only right-to-buy sales that attract a 75 per cent tax-not a tax on the capital gain, but a tax on the sum received-as it is also imposed on the sale of bits of land and properties that are vacant and not subject to the right to buy. Where local authorities, like the Rowntree trust, would like to sell council houses to get a better mix of incomes across an estate, local authorities will not be able to recycle the proceeds from those sales, as they will have to pay 75 per cent to the Treasury. I think that the Treasury will argue again that it would like to see those receipts coming back to it since deficit reduction is top of the list of the Government's priorities, but the Treasury is not going to receive anything from the sale of properties outside of the right to buy if local authorities know that it is such a bad deal to sell them in order to regenerate an area using the money they raise. No businesslike authority will proceed with these sales in order to pay money to the Treasury as a voluntary act. Local authorities simply will not do it. The Treasury is not going to forgo capital receipts if the 75 per cent tax on councils is lifted for those properties where the right to buy does not exist-in other words, where the council can make a sale voluntarily rather than being compelled to do so, as with the right to buy. I hope that the Government will be able, if deficit reduction in this spending round is so paramount that nothing can be done about the right-to-buy receipts, at least to offer to some extent a reassurance in relation to the sales of other properties that are not subject to the right to buy.
	During the summer I have had discussions and correspondence with the Minister, and I hope that she will be able to tell us this afternoon that there may be some change of the Government's mind about this very severe restriction on local authority activity, one where the ludicrous level of taxation makes it very difficult to run a business. I beg to move.

Lord Beecham: My Lords, the noble Lord referred to the 75 per cent tax levied on the proceeds of right-to-buy sales. It is interesting to note that at the moment there is a good deal of pressure on the Government to abandon the 50 per cent tax charged on those with substantial incomes and that, indeed, at least part of the coalition Government is interested in a mansion tax, which I suspect would be levied at substantially less than 75 per cent. In the context of housing, we should not be thinking in terms of taxation. The nation is paying a very heavy price in terms of housing need for the refusal of Government, initially in the 1980s, to allow any of the proceeds of the sale of council housing to be reinvested in housing and, it must be said, for the somewhat belated and modest change that was made to those rules by the previous Government. It does not seem to make any kind of economic sense.
	The money raised by the right to buy would be ploughed back into housing provision. That would have two effects, the first of which would be that it would create assets on the balance sheet; it would not disappear into thin air. Secondly, it would give a much needed boost to the construction industry and therefore to the economy at a time when, as the Chancellor has belatedly conceded, things are not looking good in terms of the projected growth rate. Thirdly, it would lead to employment being taken up and thus a reduction in the cost of paying benefits. Most particularly, I suspect that the result would be that houses would be built rather more quickly than through the hoped-for gains to be made by the proposals in the national policy planning framework, which seem to assume that planning is the reason for the low number of houses being built, whereas of course the key issues are in fact finance and people's capacity to buy.
	Looking at it purely in housing terms, the noble Lord's amendment makes a great deal of sense. I hope that the Government will rethink their position because it would make an immediate and much more significant contribution to dealing with the housing problem, as well as helping with economic growth without damaging the balance sheet. Indeed, in some respects it would strengthen the balance sheet with assets that are likely to appreciate.

The Earl of Listowel: My Lords, I hesitate to speak, having not taken part in previous work on this Bill, but my noble friend's amendment and his words bring to mind some research that was brought to my attention some years ago into lone mothers living in isolation with their children, scattered around cities. They were often forced to live a long way from their communities and extended family because there was insufficient housing stock to enable them to be placed closer by. So if my noble friend's amendment will help local authorities to supply enough housing to ensure that parents-more often than not mothers-bringing up children on their own had easy access to their communities and extended family, I certainly want to support it.

Lord Whitty: My Lords, I also strongly support this amendment. First, if we look retrospectively, had this provision applied from the start of right to buy, much of the pressure on social housing, and by extension on other housing sectors, would not have arisen. I am not saying that it would have completely resolved it, but it would have made a major contribution to stopping us being in the position that we are in.
	The second point, which the noble Lord, Lord Best, emphasised, is that it would have enabled a lot of our worst housing stock to develop the manner of mixed tenure, creating a stable, reliable and interactive community instead of the isolation into which some of those estates have fallen.
	The other point, also made by my noble friend Lord Beecham, is that I do not understand the economics of this. It would be an asset on the books of part of the public sector. Economically speaking, the deficit relates to the totality of public borrowing. In international opinion, raising money relates to the total deficit on public spending. The fact that it is in the Treasury's accounts rather than the local authorities' accounts economically makes no difference. It makes a bit of difference to the credibility of the Chancellor of the Exchequer from time to time, but economically this has always been nonsense and it is nonsense that we should now end. If we are to interpret localism and self-financing of the housing activities of local authorities effectively, surely this anomaly needs to be rectified. I hope, therefore, that at some stage the Government are going to recognise that.

Lord McKenzie of Luton: My Lords, we have put our name to this amendment and support it thoroughly for the reasons that have been advanced by all noble Lords who have spoken in favour of it. I want to pick up the point my noble friend Lord Whitty made about how it all pans out in the Government's accounts. It seems to me that the Government's arguments on deficit reduction have not been entirely logical. They recognise the loss of rental income that arises with local authorities because the proceeds are snaffled by Government to the extent of 75 per cent. Therefore, debt that is imposed on local authorities is reduced by £862 million.
	Correspondingly, the government debt is higher. If local authorities retained the proceeds, the government debt would be lower, presumably by £862 million, and local authority debt correspondingly higher. That seems to be a net nil. Local authorities would then have the proceeds either to pay down their debt or, as we would all urge and my noble friend Lord Beecham in particular urged, to reinvest in new stock. So I think the Government are entirely in the wrong place on this.

Lord Shutt of Greetland: My Lords, I thank the five noble Lords who have spoken and I pay tribute to the noble Lord, Lord Best, and his work in housing over many years. The business of the amount gained when houses are sold and how the money is used is a subject that many of us have been debating for most of our years in public life.
	What we have here is a total, and there are trade-offs in this element of the Bill. Although I understand the intention behind proposed new Clause 51, which is to end the surrender to central government of 75 per cent of receipts from the sale of right-to-buy and similar houses, and although I appreciate councils' disappointment that we have not been able to end the policy, its continuation is necessary to help with the country's huge fiscal deficit. The Government have ensured that the viability of the self-financing settlement is not affected by the decision. We are compensating local authorities for loss of rental income from future right-to-buy sales. To do this, we have included a forecast of right-to-buy sales in our valuation. The level of debt that authorities will take on has consequently been reduced in our latest estimate, as the noble Lord, Lord McKenzie, indicated, by £862 million. In addition, all councils will still retain 25 per cent of receipts. They will also be able to retain 100 per cent of receipts from other sales to spend locally on affordable housing or regeneration. It is worth noting that receipts generated from right-to-buy sales have rapidly declined, sales being now about 5 per cent of what they were at their peak.
	I hope the noble Lord will draw some comfort from the fact that we issued a consultation on 25 August, which set out proposed amendments to the regulations governing the use of receipts arising from the disposal of council housing assets. We have proposed to amend the regulations to make it clear that the requirement to surrender 75 per cent of receipts to central government shall apply only to receipts arising from right-to-buy sales or sales that are right-to-buy in all but name: that is, sales to existing council tenants. Sales at market value to other purchasers could then be retained, provided they were spent on affordable housing, regeneration projects or paying off housing debt. I trust that that is helpful and, bearing it in mind, that the amendment will not be pressed.

Lord McKenzie of Luton: The Minister said that the Government were reducing the level of debt that local authorities would otherwise take on because of this policy by some £860 million. Does it follow that central government debt is correspondingly £860 million higher than it would otherwise have been, and how does that help deficit reduction?

Lord Shutt of Greetland: I might have to think that one through, because I see the contra. On the other hand, there is only one central Government. The problem that we have all along is that some 170 local government entities are involved in housing. At least you know where you are with central government and that £862 million. The position can be entirely different in local government.
	I would like to think that there will be a time when this policy is not in place. However, as I indicated, it is no longer the big deal that it was, given that so many former council houses have been sold and the amounts coming in are nothing like they were at their peak, when this Government were not in business.

Lord Best: My Lords, the housing revenue account is often compared to the Schleswig-Holstein question. Of the only three people who understood it, one had committed suicide, one was in a madhouse and one was in a monastery. Following the debate on the housing revenue account today has been a bit like that.
	I am very grateful to noble Lords who have spoken on this. The noble Lord, Lord Whitty, made two fundamental points. First, if only we had kept the receipts during the past 30 years, we could have built a lot of houses and renovated a lot more. That money has evaporated. If we could get that changed henceforth, that would be thoroughly commendable. The noble Lord also made the point that if local authorities had been able to sell vacant properties on some of their estates on the open market, they could have introduced people on different incomes and created mixed-tenure estates, which would have been better socially for everyone concerned. However, there is absolutely no reason why local authorities would do that, because they would lose all the money that they received from the sale and could not then replace the home that they had sold. I am very grateful for that intervention and for those of the noble Lords, Lord Beecham and Lord McKenzie.
	I shall certainly bank the very important point that in respect of sales outside the right to buy-the voluntary sales by local authorities-the intention is that in future the levy will be lifted. That could be quite a significant change in the future. The leader of the London Borough of Hammersmith & Fulham, Councillor Stephen Greenhalgh, is very much in favour of this. He explained to me that he has properties which, going back to the days of municipalisation, are scattered in some streets and are now in need of substantial repairs or improvements, although they are also very valuable. Rather than spend a great deal of money on some of those properties when they become vacant, it would be much better for Hammersmith & Fulham to sell them on the open market and not spend the money on the repairs. That money would be recycled, getting two or three flats elsewhere for the price received for those properties in Parsons Green or wherever they happened to be in Hammersmith & Fulham. Therefore, the Minister's concession here may open some opportunities for councils to take in receipts to recycle in a very meaningful way, and I am very grateful for that concession.
	In relation to the right to buy, we live to fight another day. For the moment, I beg leave to withdraw the amendment.
	Amendment 41 withdrawn.
	Clause 156 : Further payments
	Amendment 42 not moved.
	Clause 157 : Further provisions about payments
	Amendments 43 and 44 not moved.
	Clause 158 : Limits on indebtedness
	Amendments 45 and 46 not moved.
	Amendment 47
	 Moved by Baroness Hollis of Heigham
	47: After Clause 158, insert the following new Clause-
	"Social housing rents
	Landlords of social housing may levy a rent above the target rent for that dwelling to fund the capital cost of additional facilities requested by the tenant."

Baroness Hollis of Heigham: My Lords, this is a relatively small amendment but I think that it may have wider repercussions. First, I declare an interest as chair of Broadland Housing Association. It is a medium-sized, traditional-build housing association-not a stock transfer-which seeks to meet housing need in Norfolk and north Suffolk. Every one of our homes is of decency standard and properly insulated, and we are effectively at target rent levels.
	Last year, a dozen or so middle-aged and older tenants in a small close of bungalows in sunny Norfolk asked us to install solar panels at a cost of some £3,000 to £4,000 a property. We did so and I understand that the tenants' fuel bills have fallen considerably. However, the cost of those solar panels has effectively fallen on other tenants, either in increased rents if they are below the target rents or in opportunities forgone-for example, in environmental works.
	There is now a queue for work such as the installation of solar panels, which is understandable, but as a housing association we cannot afford it for all who wish it. We know that hundreds of thousands of tenants throughout the country are in fuel poverty. They may be elderly or disabled or they may be lone parents with large families, and they want and need to reduce their fuel bills. We, as a country, are investing in grants for loft and cavity wall insulation to cut fuel poverty and reduce energy consumption. Nearly half of all carbon emissions come from buildings. As a housing association we have done all that. However, many tenants now want us to go further with, for example, solar panels, but we cannot afford to help them as we would wish, and of course they cannot afford the capital cost of doing the work themselves under the feed-in tariff proposals, amounting to some £3,000 to £8,000 a household. The Green Deal is proposed for next year, but housing associations do not yet know how it will apply to them, if at all, and they doubt that it will.
	We would like to suggest co-payment. If, say, the fuel saving from installation of a solar panel was £10 a week, the rent could rise by £5 a week above the target rent to contribute to the capital cost of the loan of that money. The tenant would keep as a bonus the other £5. Why can we not do that now? Very simply, we are at the target rent for properties, which takes no account whatever of energy efficiency. That is foolish. The Minister in her letter in August-for which I thank her-explained that she could not support the amendment. She said, first, that it would lead to increased rents, which was unacceptable, and, secondly, that this could lead to unacceptable rises in housing benefit. I challenge both those points.
	The concept of the target rent that the Minister said cannot be exceeded has of course been exceeded by Government with the introduction of 80 per cent market; that is, affordable rents. In future, with two identical houses, side by side and currently up for re-letting, one will go for a rent of £90 as it is social housing, the other will got for a rent of £120 because it is at the new 80 per cent of market value. That increase is simply because we have relabelled the description of tenure over the lintel of that house.
	Why does it make sense to have increased rent properties because we have renamed the tenure, adding nothing of value at all to the property, but not be able to increase the rents when we have markedly improved the property by reducing fuel costs? Why have we got to choose either a rent of £90 that equals social housing or one of £120 that equals 80 per cent of market value intermediate rents when it would make sense to have a rent of £95 because of investment in energy efficiency? Raising rents above the target, despite the Minister's letter, involves no new principles because government are doing that already.
	But, says the Minister in her letter of August, it might come out of housing benefit. The Minister says that such increases are not affordable and that the taxpayer would not obtain value for money from this increased public expenditure. There are two points on that. First, her new 80 per cent of market rents will largely be financed by housing benefit. Virtually every tenant going to our housing association is on HB. Whatever the tenure label-social housing or intermediate rent-it will largely be met by HB if our housing association is anything to go by. Indeed, it is calculated that to fund Mr Pickles's building programme through 80 per cent market rents at DCLG will add £2 billion to the housing benefit bill of DWP. DWP is paying for the building programme of DCLG, which reflects no added value and cannot be used to fund improved facilities, as we would all wish.
	The Minister then went on to say that such investment may not represent value for money for the taxpayer, at a time when the same government are urging energy companies and individuals to take up Government grants to increase loft and cavity-wall insulation, replace boilers or install wind turbines-which are, as is solar power, renewable. If a part of Government is urging all of us because it thinks it prudent to invest in energy reduction, why does DCLG oppose it? Indeed, why is DCLG not positively encouraging us to do what we wish and get housing associations to work with tenants to consider energy renewables such as solar panels? As I say, that will reduce fuel poverty and carbon emissions-both goals we all want. Therefore, I think that the Minister's letter in August, in reply to the original tabling of this amendment in Committee, is entirely invalid.
	I would like to make a proposal to the Government. If increased HB would be the obstacle, because the increased rent would be met by housing benefit-

Earl Ferrers: The noble Baroness is making a very interesting speech, but she will talk in acronyms. She talks about HBs, DCLGs and so on, and some of the more modest of us are not quite certain what she is talking about.

Baroness Hollis of Heigham: I apologise to the noble Earl. As I am so anxious to persuade him to agree with me, I will happily take extra time in spelling out the acronyms.
	If indeed housing benefit is the issue-because an increase in rent of £5 would be covered by housing benefit-I put it the Government that any increase in rent above the target rent for such purposes should not be covered by housing benefit, quite simply. That way the housing benefit bill to the Government would be protected and the tenant could choose whether to proceed with solar panels by way of co-payment. If the tenant did so choose, the tenant would enjoy reduced fuel bills and contribute to lower energy consumption in this country. The choice would be with the tenant, there would be no additional cost to the Government, but the reduction in conventional energy and the substitution of green renewable energy would be a gain to us all. I beg to move.

Lord Kennedy of Southwark: My Lords, the amendment proposed by my noble friend Lady Hollis is most interesting and has considerable merit. She has considerable experience in the local government and social housing sectors. Where tenants want to make major improvements or improve other amenities, I can see the case for this being financed by an increase in the rent paid on the property. My noble friend makes compelling points in particular regarding fuel poverty and green energy and also dealing with the issue of housing benefit. If the Government are not able to accept the amendment, will the noble Lord at least agree to take it away and reflect on it? It could be explored further and perhaps introduced at another time following discussion with relevant departments.

Lord Shutt of Greetland: My Lords, I thank the noble Baroness and the noble Lord for their contributions. It is more complicated than I thought. The amendment is clearly about additional facilities requested by the tenant, yet the points made by the noble Baroness have been about solar panels and, basically, energy. Clearly the amendment is about any form of enhancement required by a tenant. All I would say on the detail is that my noble friend Lady Hanham has shown me a letter that she wrote to the noble Baroness, Lady Hollis, on 9 August offering to discuss this matter. She may not have got the letter or something may have gone wrong, but this offer has not yet been taken up. My noble friend Lady Hanham would be happy to discuss the matter and that could well be a helpful way forward. I cannot give a commitment on where that would lead, but I think it would be a good thing if that offer were taken up.
	I cannot accept the amendment because it would allow landlords complete freedom to charge rents above the target rent for particular properties in order to fund the cost of additional facilities. This would lead to an unacceptable rise in the housing benefit bill. There are two types of landlord to whom the amendment could apply: local authority landlords and housing associations. Both sectors are able to exercise some flexibility over rent setting but are subject to important constraints. In the case of local authority landlords, there is the "limit rent", which is the maximum that the Department for Work and Pensions is willing to pay in housing benefit. This cap is vital to control the welfare bill. For housing associations, a direction on rent is set each year by the regulator in order to achieve a degree of consistency in rent levels across the sector and to protect the housing benefit bill. Noble Lords may not be aware of this, but for two-thirds of all tenants in council and housing association properties, the rent comes from housing benefit. So it clearly would be significant.
	The noble Baroness's amendment would remove an important control by Government over rents, which they will largely pay for. While this could pay for some improvements, it would result in uncontrollable increases in the housing benefit bill that we can ill afford. Furthermore, there would be no assurance that the taxpayer was obtaining value for money from the additional public expenditure. For this reason, I must reject the amendment. Councils and housing associations can charge affordable rents of up to 80 per cent of market rents as part of an agreement with the Homes and Communities Agency to build new homes. The extra rent must be used entirely to fund the new homes, which will produce a housing benefit saving as they are still at rents below those charged in the market.
	I hope that, in the circumstances, the noble Baroness, Lady Hollis, will take up the offer from my noble friend Lady Hanham and that on this occasion she will not press her amendment.

Baroness Hollis of Heigham: My Lords, I regret that the noble Lord, Lord Shutt, did not actually listen to the arguments I sought to make. He has repeated the two points made by the noble Baroness, Lady Hanham, in her helpful letter in August, which I sought to rebut in my speech and on which the noble Lord, Lord Shutt, has not commented. It was as if the speech had not been made and that the arguments of August were still the only arguments in town.
	I remind the noble Lord that I was not arguing for complete freedom for landlords, as he suggested. It was made very clear that this would be at the initiation of the tenant. The reason I used the solar panels example was because it had such obvious spill-over benefits for the tenant, fuel poverty, energy consumption, renewables and the reduction of carbon emissions, so we would all gain. I used the example, too, because it is consistent with the drive by this Government in the Department of Energy for the further extension of insulation and the use of renewables. So it is entirely consistent with government policy, though in a different department, and it would be initiated by the tenant and would therefore not give complete freedom to the landlord.
	Secondly, the noble Lord argued, as was argued by the Minister's letter, that it would lead to an unacceptable rise in housing benefit. I hoped that I had made it clear that if the Minister so wished it could all be outside and above the rent covered by housing benefit. I am well aware of the role of housing benefit-I made that point explicitly-but the Minister has not replied to that offer as a way forward that would address the issue, which I understand, of housing benefit, but would equally allow us to respond to a perfectly proper and appropriate request by tenants to be able to reduce their fuel bills at no cost to the Government. That is what I sought. The noble Lord, Lord Shutt, has not answered that point at all.
	Given that there is clearly no meeting of minds, because people are not listening to each other's arguments, I wish to take up the suggestion made by the noble Baroness, Lady Hanham, for a further discussion about this matter. I assure her that surveyors across the country are very interested in trying to proceed with such policies as a way of producing the nearest that we can get to things such as passive housing, and so on, which we need to see in this country. I beg leave to withdraw the amendment.
	Amendment 47 withdrawn.
	Clause 159 : Power to obtain information
	Amendment 48 not moved.
	Clause 160 : Determinations under this Chapter
	Amendment 49 not moved.
	Clause 161 : Capital receipts from disposal of housing land
	Amendment 50 not moved.
	Amendment 51 not moved.
	Clause 162 : Interpretation
	Amendment 52 not moved.
	Clause 163 : Standards facilitating exchange of tenancies
	Amendment 52A
	 Moved by Baroness Hayter of Kentish Town
	52A: Clause 163, page 152, line 8, at end insert-
	"( ) In section 36 of the Housing and Regeneration Act 2008 (information in relation to social housing) in subsection (1) after paragraph (c) insert-
	"(d) engaging with the Housing Ombudsman.""

Baroness Hayter of Kentish Town: In moving Amendment 52A, I shall speak in favour of amendments in the same group, particularly Amendment 68, standing in the name of my noble friend Lord Whitty and myself, and of similar principles as set out in Amendment 69, which appears in my name and in the names of my noble friend Lord Kennedy and the noble Lord, Lord Best.
	Clause 167 introduces what is called a "democratic filter" as regards the housing ombudsman. What it means is that all complaints that currently go to the housing ombudsman would instead have to be taken to an MP, a councillor, or a tenant panel member for a hearing. Not only that, but a tenant would not be able to take their case to the ombudsman unless agreed to by one of these people, giving them a veto over these citizens' access to the housing ombudsman.
	I would like to go through seven reasons for resisting this clause. The first is the role of MPs untrained in this area and the conflicts of interest that might be involved, which I think are fairly obvious. It would be a brave MP or councillor who rejected a complaint maybe three weeks before an election. The councillor could, of course, be the provider of housing, which would be a serious conflict of interest. What if that MP or councillor had already heard of the complaint in their surgery in their role of representative? How could they then adjudicate de novo on a complaint? If the councillor happened to know the local housing official, it would hardly be seen as an independent hearing of the complaint.
	Furthermore, our MPs and councillors, wonderful though they are, are not trained in alternative dispute resolution or complaints handling, or in the accurate recording of such findings and giving the reasons thereof; nor indeed are most of them well-versed in some basic rules of natural justice and fairness and the handling of evidence. They will not be accustomed to awarding redress and they will not have the authority to enforce their awards.
	There could also be a threat to a tenant's privacy if they had to reveal some personal circumstances to an elected officer who was not under a code of conduct to respect confidentiality. There could be a lottery between the findings of different councillors and MPs. At present the housing ombudsman deals with about 5,000 cases per year, with a high measure of consistency to add to the centrality of fairness. It could, of course, also be a very heavy burden on an MP and councillor. I have to confess that I have been neither, but I do wonder whether they are ready for this extra little task.
	It would also make MPs adjudicators. They would therefore lose their role as champions on behalf of their constituents, quite unable to advise them on how to formulate a complaint if they themselves were the people to hear the complaint. Furthermore, having rejected the complaint, how could they then promote it to the housing ombudsman?
	So the first of the seven problems is about the role of the councillor and MP. Secondly, the British and Irish Ombudsman Association strongly opposes the proposed filter in the Bill. The association believes:
	"Public service ombudsmen form an integral part of the administrative justice system and it is essential that citizens' access to justice should be unfettered. Any restriction on access is counter to the principles upon which the ombudsman institution is founded".
	Indeed, one of the principal conditions for being an ombudsman is that citizens should have direct access. The Parliamentary and Health Service Ombudsman regards their MP filter as restricting access to their service.
	Thirdly, let me quote from others. The Law Commission says that this clause as it stands could hinder investigations and it calls for the filter in this clause to be scrapped. The commission prefers a dual system whereby complainants could either go through a local representative or direct to the housing ombudsman, which is what these amendments set out.
	The National Housing Federation believes that MPs and councillors should only be involved at the discretion of the complainant, not at the insistence of the Government. The federation strongly opposes the proposal in the Bill to deny access to the ombudsman without the MP or councillor's permission. It also notes that similar requirements have been abolished elsewhere, such as for the Local Government Ombudsman.
	Coming from Kentish Town, perhaps your Lordships will excuse me if I also refer to the Camden Association of Street Properties and Kentish Town District Management Committee, which have said that they are angry at the proposed block on tenants' rights to access the ombudsman, which in their view has worked so well.
	The consumer organisation Which? also supports the amendments in this group and, as a matter of principle, is opposed to the proposal in the Bill. It believes that consumers are empowered when they can take action themselves. It therefore wants a complainant to be able to go to the Housing Ombudsman. It is for the ombudsman to decide whether to accept that complaint, not a go-between. As Which? has said, given that the Government have a big agenda on consumer empowerment, it finds it very odd that the CLG is disempowering consumers in this way. Which?has said,
	"It is our view that requiring complainants to refer any complaint via a MP completely undermines genuine consumer (or citizen) empowerment".
	Which? points out that an MP filter goes against the grain of what the Government themselves would like to see, and refers to the Government's report, Better Choices:Better Deals, which is all about how people can help themselves. In that report, the Minister in the other place, Ed Davey, wrote:
	"we want to see confident, empowered consumers able to make the right choices for themselves",
	and being able,
	"to resolve problems when things go wrong".
	Which? believes that complainants should be able to take their complaint directly to the ombudsman, as this will help complainants resolve problems themselves. As it says, tenants do not need a filter to double-check on their case. Incidentally, Which?'s opposition to the Bill is predicated on access to the ombudsman being possible only once a complainant has exhausted the relevant in-house complaints procedures.
	If I may refer to tenants, an ICM survey shows that 73 per cent preferred either to go direct to the ombudsman or at least to have the choice of whether to use an MP. Councillor Stacy, leader of Islington Liberal Democrats, said,
	"I believe it should be the tenant's choice as to whether they involve me or not",
	and he noted that the proposal was in neither the Liberal Democrat manifesto nor the Tory manifesto nor, indeed, in the coalition agreement. I hope therefore that the Liberal Democrats will be supporting us in the Lobbies on this.
	The Housing Law Practitioners Association is against the removal of the right which tenants have had. It says that the Housing Ombudsman,
	"has proved ... a valuable source of alternative remedies".
	The Cabinet Office's own guidance requires that the term ombudsman "must be avoided" unless there is accessibility in addition to fairness and public accountability.
	Fourthly, the July 2011 Open Public Services White Paper emphasises the role of redress where choice is not available. The new framework for choice in services will also give additional rights to individuals, but the Government have acknowledged that there needs to be a means to enforce these rights. They set out that that power of redress should sit with the ombudsman, who can specify remedial action. The White Paper even names the Housing Ombudsman covering social housing for this role-yet the Bill would neuter this very body so that most complaints would not come to it.
	Fifthly, on the learning from the quantum of cases, knowing the similarity of complaints that have been made and what redress should be awarded gives a much better idea of whether complaints are likely to be frivolous or better dealt with elsewhere. There is a body of expertise that builds up, such that generic lessons can be learnt and fed back to legislators or providers.
	My last two points are simple. No reason has been given for this: it was not in a manifesto. There is no evidence of a problem from the right of direct access to the Housing Ombudsman. There has been no consultation with tenants, landlords or their representatives. The Minister in the other place said that the measure was meant to re-engage politicians with social housing. It will do no such thing. Councillors and MPs can advise tenants, champion their causes and assist in disputes but they are representatives, not adjudicators.
	Finally, the measure is wrong in principle. Why should we deprive tenants of a right that they have enjoyed-access to free, professional dispute resolution? Why should they be denied such access without the say-so of a councillor? The amendments in this group would allow a complaint to be heard locally by the MP or councillor if the tenant so chooses but would retain the right to go to the ombudsman.
	Without these amendments tenants will lose that choice and will lose access to justice. Residents who just happen to be in social housing will be further stigmatised. No other category of citizen is having their right to an ombudsman removed in the course of remedying a perceived democratic deficit. In the light of that, I hope we can retain the right of direct access to the Housing Ombudsman. I beg to move.

Lord Tope: Whereas the noble Baroness began by saying that she had been neither an MP nor a councillor, I begin by saying that I have been both. I was an MP for a rather short tenure a very long time ago but have been a councillor for the past 37 years, representing a ward with a substantial amount of social housing. Therefore, I have real and practical experience of some of the issues that have been spoken of. The noble Baroness will know well that I have considerable sympathy with much of what she has said. Indeed, my noble friend Lord Shipley and I have our names to Amendments 70 and 73 in this group. As I say, I have great sympathy with what the noble Baroness has said. My preference would certainly be to have unfettered direct access to the Housing Ombudsman. I feel strongly that tenants should have the right of direct access to the Housing Ombudsman when necessary, and I wish to spend a few moments considering when that is necessary.
	It is for the Minister, and certainly not for me, to explain the Government's reasons for the proposals in the Bill and for wanting to tackle the matter in this way. However, we have to recognise that, certainly in the 37 years that I have been a councillor, the involvement of local authorities, and therefore of councillors, in housing management issues has decreased. We have had the wholesale stock transfer and the creation of ALMOs. Generally, the move has been away from involvement. It is fair to say that some councillors-I cannot say that this has been my experience-have much less engagement in the day-to-day business of housing management, and therefore of knowing and understanding the issues that their constituents, as tenants, experience. If the Government wish to bring politicians, particularly councillors, closer to these issues-I do not know what the relevant phrase is-that is an objective we all share. We might have varying degrees of cynicism about how effective that will be, but it is an objective that we all share. I certainly share the Government's objective in that regard.
	If the Government's objective is also to ensure that, whenever possible, complaints and issues are resolved locally, I am sure that we all share that objective too. That is clearly desirable for all sorts of reasons. It is usually quicker, more effective and engages people. I would expect that, in most instances when a tenant has a complaint of this sort, normally the first port of call would be a councillor or MP, partly because they are better known-or at least their existence is better known-than the Housing Ombudsman and they are more accessible and accountable. Therefore, I would normally expect an issue to be raised first with a councillor or Member of Parliament. I would expect that, in pretty well every case, that representative would try to get the matter resolved locally as that is what councillors and MPs do. Instead of immediately going off to the ombudsman, they go to the relevant housing management authority to try to resolve the issue and then tell their constituent what a wonderful job they have done in resolving the problem. That is what happens in reality. When they are successful, that is good, right and proper.
	The difficulty that I have with the Government's proposal is that, while I am sure that we all share those objectives, one of the-I hope unintended-consequences is that it will give councillors, Members of Parliament and tenants panels a right of veto. I have to say that that is wrong. I do not think that it is our job as councillors, Members of Parliament and so on to be the final adjudicator of the rightness or wrongness of the complaint. I would expect that in practice most Members of Parliament and most councillors would anyway refer something to the ombudsman-whether the Local Government Ombudsman or Housing Ombudsman. That was always my practice whether I thought the complaint was wholly justified or even unjustified. I felt that the complainant had the right to independent arbitration and to go to an ombudsman, and referred it that way.
	I have had the opportunity to discuss this at some length with the Housing Minister, who says that as an MP that was what he always did. The reality, which I know from personal experience, is that some elected representatives, for whatever reason-and sometimes for no good reason other than personal idiosyncrasy-refuse to do that. That is wrong. I do not think that a Member of Parliament or a councillor should have the right to deny the tenant access to the ombudsman to have the complaint, whether justified or not in our view, properly investigated and independently decided upon.
	A little later this afternoon we will get to Amendment 73A and those with it. Amendment 73A is a compromise to try to help the Government, which is always our objective on these Benches. Amendment 73A says that, if the designated person will not refer the complaint-we should have included the words, "or fails to do so within 30 days", or some other given period-the tenant has the right to go direct to the ombudsman. That amendment has been decoupled from this group for reasons that I understand, but I hope that when the Minister replies she can give us clear and strong words of comfort that it is not the Government's intention to give the right of veto to us councillors to decide whether or not a complaint is worth forwarding. We need to ensure that the tenant may do so when necessary-I come back to those important words-if a designated person who is willing to forward the complaint cannot be found. That is a pragmatic and sensible compromise to find a way through the entirely honourable and proper intentions of the Government, which we would probably all support, and the undesirable effects of the way in which they are trying to do it. I hope that the Minister can give us clear comfort on that. If she is able to do so, we will judge what to do with Amendment 73A when the time comes.

Baroness Hollis of Heigham: My Lords, like the Minister I, too, have been a housing chair in a local authority, for some 11 years. I am also chair of a housing association-an interest that I have declared-and regularly sit at stage 4 of precisely these complaints panels that are the subject of discussion. I am sure that the Minister knows but I wonder whether your Lordships realise how thorough the complaints procedure is, and rightly so, within housing associations and local authorities, particularly encouraged by the TCA of the Homes and Community Agency.
	At stage 1, the tenant's complaint-often, it is a neighbour's complaint against the behaviour of a neighbour of some sort-is investigated by the local senior housing manager. If that is not resolved to the satisfaction of the tenant, stage 2 means that it will go to the housing manager at the top of the organisation, who will then seek to get all the information, build the file and see whether some resolution can be arrived at. If that is not satisfactory, there is a stage 3 where the complaint goes to the chief legal officer, who is usually the deputy chief executive of the housing association, who goes through the file, takes the evidence, makes further notes and attempts again a further resolution of the difficulty. If that is not enough-by this stage, most complaints have been reasonably addressed-the matter goes to stage 4, which involves the panel, chaired by someone like me, alongside the tenant board representatives of the housing association and the senior staff. Five or six of us spend perhaps a couple of hours going through a thick file and seeking as best we can to hear and resolve the tenant's complaints and concerns.
	In my experience, the tenant nearly always finds that satisfactory. However, if on that occasion the tenant is still not satisfied, having gone through the four stages to the final panel hearing, putting in a fifth stage, bringing in who knows what-perhaps the councillor who sent the letter into stage 2 or the MP who sent a letter into stage 3-as an independent adjudicator, sitting on top of those four stages to decide whether to progress the complaint to the ombudsman, would be to add an absurd additional bureaucratic delay that would stand between a tenant whose complaint, legitimate or otherwise, should by rights be heard by the ombudsman if the appeals system locally has been exhausted.
	When I, with my modest experience of chairing panels at stage 4 of an elaborate appeals and complaints process, saw these government proposals for a stage 5 to go in before there is the possibility of recourse to the ombudsman, I was baffled beyond belief. If we believe in reducing bureaucracy and regulation, what on earth are we doing putting this in the way of a tenant who feels that they have exhausted all the local appeals and who therefore wants to go to the ombudsman? It is an unnecessary, restrictive and undemocratic block on a tenant's rights.

Lord Newton of Braintree: My Lords, I ought to declare a string of interests. I am an ex-MP; my wife is a district councillor; I was chairman of the Administrative Justice and Tribunals Council, which had a close relationship with the British and Irish Ombudsman Association; and I know Mike Biles, the Housing Ombudsman, quite well. I should also apologise to the noble Baroness for not having added my name to her amendment, as she encouraged me to. I would happily have done so, and should have done.
	I will make clear to my noble friend that I agreed with every word that she said, and every word that the noble Lord, Lord Tope, said. The starting point is that if this is administrative justice-and most people would say that it is-what right have the Government to say that somebody is to intervene in somebody else's right to seek administrative justice? It could not conceivably be argued that somebody should need an MP's or a councillor's permission before going to a tribunal, a court or anything comparable in the administrative justice field. Why should we have it here? All this comes at a time when the Parliamentary Ombudsman has a consultation document out, which I know she feels quite strongly about, for the removal of the MP filter in respect of the ombudsman. This was supported by unduly sensitive MPs 50 years ago when the ombudsman-a foreign creation-was introduced. However, as far as anybody can judge, now it is not supported by most MPs, who also think it should go.
	Why should people be subject to the vagaries of what their councillor, tenant panel or even-dare I say it?- MP thinks about whether it is a case for the ombudsman? That is a matter for the ombudsman to judge. If there are procedures that the tenant should go through beforehand, such as those described by the noble Baroness, Lady Hollis, the ombudsman can make the point: "We are not looking at this until you have had it looked at along the other lines". It would be perfectly reasonable for him to do that, but there is no serious case for what the Government are proposing in the Bill. I very much doubt whether it was part of the coalition agreement or has been seriously endorsed by the Prime Minister or the Deputy Prime Minister, because it is just not the kind of proposal they would support. Individuals ought to have this right, and we in this House ought to be defending it.
	I have one last question to which I would like an answer. We have lots of ombudsmen in this country. We have the Parliamentary Ombudsman with an MP filter; we have the Health Service Ombudsman, who is also the Parliamentary Ombudsman, in practice, with no MP filter; we have the Scottish Public Services Ombudsman, with no filter at all, for Scots; we have the Public Services Ombudsman for Wales with no filter at all in respect of matters that he or she can consider so, in a way, this is yet another form of discrimination against the English, and I am fed up with it. It is wrong in principle, it is daft and the Minister should take it away and get rid of it.

Lord Beecham: My Lords, I welcome the contribution of the noble Lord, Lord Newton, not least because he is only the second Conservative Back-Bencher to speak in seven hours of debate on Report. I dare say we will hear a great deal more from him and, I hope, others as we go forward.
	I entirely endorse the remarks that have been made so far by noble Lords, and I share the experience of the noble Lord, Lord Tope, of serving as a local councillor. It is frequently a local councillor's task to take up tenants' complaints, as one does, with the relevant housing department or ALMO-many authorities have now transferred their stock-to help people through the council's complaints procedure and to help them move complaints to the ombudsman. Many of us have done that. I find it rather patronising of those who suggest that it is somehow necessary to reconnect councillors with social housing. Most of us who represent areas with social housing regard that as part of our daily, weekly and monthly routine.
	However, there are some additional issues to which I would like to refer briefly. First, as I read the Bill, there need be no nexus between the individual making a complaint and the councillor for the area in which he lives, because the Bill speaks of a member of the housing authority. It could be from one end of Newcastle to the other in my own case. There is no necessary connection between the tenant and the member he approaches, and that is hardly sensible, even if one follows the line of the Government's thinking on this matter.
	Secondly, I presume that under the adjudication by the ombudsman there may be the possibility of an award of compensation. That is not necessarily binding on an authority, but it is pretty indicative and most authorities, though I regret to say not all, comply with those recommendations and make a payment when one is indicated. On the face of it, it would seem that the individual member adjudicating would also have that responsibility. It seems distinctly worrying that there should be implicit pressure on a member not only to make a finding but also, perhaps, to award compensation. That does not seem to be a healthy relationship between an elected councillor or, for that matter, a Member of Parliament, and a constituent.
	The third factor that we may have to bear in mind is that there are pending changes in the legal aid and advice system that will effectively strip people of their right to legal aid and advice. In this housing area, whether it be with local authorities, housing associations or other landlords, there is frequently a need for legal advice and support, and one fears that effectively removing that source will be unhelpful to tenants. Frankly, imposing the responsibility on elected members, whether councillors or MPs, is by no means a substitute for such proper advice.
	All these factors tend to the same direction, namely that the amendment should be accepted by the Government. There is no huge political issue here. As we have heard, there is no demand for this outside, from tenants, their representatives or anybody else. There is no logical basis for the recommendations and I hope that the Minister will indicate that she will think again about the desirability of this additional superstructure on a system which is working perfectly well.

Lord Whitty: My Lords, my name is on Amendment 68, which provides for a dual system. I do not think anyone is arguing that the tenants or leaseholders should not have the right to call in their councillor, MP or tenant panel. The issue, as has been said, is whether they should also have-from the start, not just when they have already been to their councillor-the ability to go direct to the ombudsman.
	I have two points on this. First, it is not only a contradiction to principles of administrative law, it is also a direct contradiction to most consumer practice in the rest of the economy. As the noble Lord, Lord Newton, said, there are numerous ombudsmen. Some were set up by Parliament, such as the financial services and energy ombudsmen, and some are industry-based, dealing with anything from double glazing to property. In none of those cases is there a filter after the initial filter of having to raise the complaint with the provider in the first place, as my noble friend Lady Hollis has said. After that point, there is not a single example where a third party, of whatever description, is required to intervene. That may be discrimination against the English, but it is certainly discrimination against tenants and leaseholders as compared with any other consumer.
	Secondly-this ought to be an obvious point, but it has not yet been spelled out in this crude way-there are a lot of reasons why individual tenants and leaseholders may not want to go to their local councillor. They may have fallen out with them, or had a terrible decision from them, or they may be their political opponent. There are also all sorts of reasons why they may not wish to raise the issue through the tenant panel, although I believe that is a good innovation. They may know people on the panel whom they disagree with or they may not approve of earlier decisions made by the panel. It surely should not be for Parliament to say to them that, despite all their reservations and previous experience, they must go through one of these three channels. All three channels are important and should be there, and if they need to be put on the face of the legislation let us do so. But we must not deny the ordinary social housing tenant or leaseholder within social housing provision the right to go direct to the ombudsman. I plead with the Government to drop this absurdity.

Baroness Eaton: My Lords, I was delighted that the noble Lord, Lord Whitty, referred more positively to the role of councillors than has been the case elsewhere, except for the noble Lord, Lord Tope. I am very supportive of stock transfer, but I do feel that with these arrangements there has sometimes been a reduction in the ability of councillors to be involved in housing activities in their area.
	As we all know, in our role as councillors-and I declare that I am one-we are expected to be community leaders. One of the most important parts of the well-being of a community is how its housing operates and functions on behalf of tenants-the social housing aspect. I firmly believe that it is important that elected members have the opportunity to work closely with tenants. As the noble Lord, Lord Beecham, said, those of us who are active in that area already do not really understand why some people do not agree. It has become less obvious nowadays to tenants of housing associations and ALMOs that councillors really are their first port of call. I very much support the role of the councillors in this activity.

Lord Best: My Lords, I, too, support the role of councillors and their engagement in these processes, but I do not think that this is an either/or. My name is against Amendments 69, 71 and 72. If people do not wish to go to the councillor for any reason, surely they should have the opportunity to go directly to the ombudsman service. My interest is that I have been on the receiving end of the ombudsman's judgment, complaints having been made about organisations that I have chaired and run, and I think the ombudsman service is great. It resolves complaints that have been running sometimes for ages; the filing cabinet is full of going backwards and forwards, the ombudsman sorts it out, the decision is final. It is a professional service. The British and Irish Ombudsman Association thinks that an essential ingredient in any ombudsman service is that the consumer has a right of direct access to that service.
	I chair the Council of the Property Ombudsman, which looks after the private sector, separate from the arrangements for the Housing Ombudsman in the social housing sector. In the private sector, of course, tenants can go direct to the ombudsman; they do not have to go to a council, an MP or a tenant panel. That system works extremely well. I have watched the process from both sides of the fence. Ombudsman services really work and direct access to them seems an important ingredient.
	We have one example. The noble Lord, Lord Whitty, said he did not think that there were any examples of there being a bureaucratic filter of this kind, but I think the Parliamentary Ombudsman is the last outpost of this approach. It applied to the Local Government Ombudsman but was scrapped as it was found to be unworkable and unnecessary, but with the Parliamentary Ombudsman, going through your MP remains. However, Ann Abraham, the Parliamentary Ombudsman, says:
	"The MP filter delays the resolution of complaints by the ombudsman and even deters some people from taking their complaints to the ombudsman at all".
	I think it likely, as a result of the consultation now going on, that the filter will be dropped in that last case of the Parliamentary Ombudsman. So let us by all means engage councillors and encourage people to go to their councillor-sometimes that can be the best kind of mediation and local way of organising things-but let us allow people, if they wish, to go direct to the ombudsman service. It is there as a professional body and it sorts things out.

Lord True: My Lords, I also declare an interest as a local councillor. I must say to the noble Lord, Lord Beecham, that my aged aunt, who has a great fear of spiders, says, "In September and October never talk about a spider, otherwise you will talk one up", and one invariably comes up. I heard what he said about the contributions of Members on this side to these debates. When he makes such comments, I have to point out that we made very little progress with groups yesterday and there may be some connection-not with the Conservatives but with other Members in the Chamber.
	I wish to follow very strongly what my noble friends Lady Eaton and Lord Tope said. I have visited a number of authorities and it is true, sadly, that in many authorities where there has been large-scale voluntary transfer, there is a growing disjunction between the council side and RSLs. As I see it, aspects of this proposal from the Government may be designed to break that down and to reinforce the role of a councillor. In my authority we have introduced a tenants' champion system in order to encourage people to use the local resource of the council as a first resource for complaint and redress against social landlords. That is desirable. Surely in the spirit of this Bill things should be settled as locally as they can be. There are all forms of bureaucracy and the ombudsman system in itself is potentially that. I agree that tenants may not need a filter, but in some circumstances they may need a local champion.
	I am not quite so absolutist about these proposals as some others who have spoken. However, I hope that my noble friend will listen to the debate, particularly to the points made by my noble friend Lord Tope, and see whether some middle ground can be found that will enable tenants to have this recourse, but perhaps in the normal course of events to encourage people to seek to settle matters locally.

Lord Greaves: My Lords, this is the first time that I have spoken on Report so I should declare a few interests. I am an elected member of a district council in Lancashire, a vice-president of the LGA, a vice-president of the Open Spaces Society and a member of the access, conservation and environment group of the British Mountaineering Council. Those are the interests I can think of that might come up during Report. If I have any others, I shall declare them later.
	I apologise for having to nip out of the Chamber for the latter part of the speech by the noble Baroness, Lady Hayter, and the beginning of the speech by my noble friend Lord Tope. I can assure everyone that I probably agree with every word that they said, even when I was not here, on the basis of what they have said otherwise. We had a glowing account from the noble Baroness, Lady Hollis, about how wonderful the complaints and resolution system is in her housing association.

Baroness Hollis of Heigham: My Lords, I was not trying to say that. I was trying to say that, having gone through such an exhaustive system, I could not see what added value would come by having a fifth tier, an MP or a councillor, as opposed to going direct to the ombudsman.

Lord Greaves: I entirely accept that. However, in my experience, not all housing associations are the same and some do this better than others, which is inevitable with any type of organisation. In a sense, if there are housing associations or social landlords that do not do it quite as well as the organisation in which the noble Baroness, Lady Hollis, is involved, that is an even more important reason why tenants should be able to go to the housing ombudsman as easily and quickly as possible.
	Like my noble friend, we on these Benches would have preferred that this proposal from the Government was not in this Bill. It seems to go back to a local government ombudsman system that, as noble Lords have said, used to exist in local government but that, frankly, was not necessary and in some cases was harmful. There is no doubt whatever that on some occasions councillors used to find reasons not to pass complaints on or tried to persuade people not to pursue them. I always took the view that unless it was clearly vexatious I would automatically pass it on, even on one occasion when it concerned a complaint against the borough council about a housing matter in which I had been closely involved. I was chairman of the housing committee and I still said, "I will pass it on because it is right and proper that it gets dealt with".
	At Lancashire County Council, on one occasion I made a complaint against the education authority. Shortly after, I went to a reception of important people at county hall in Preston. As soon as I walked in the room, the then education officer came bounding across the room and at the top of his voice tore a strip off me for daring to question the reputation and organisation of that education authority. He then marched back to the other side of the room. I was much younger and a bit more timid than I am now but I still marched after him and, in an equally loud voice, tore a strip off him and told him that he was undermining democracy. In a sense, I should not have had to be there as part of that system. The people involved should have been able to go direct.
	Along with other noble Lords, I think, around the Chamber, we have had quite a few discussions with members of the Government, particularly with Grant Shapps, who I believe is in charge of the housing parts of this Bill. We came to the view that we might win the argument but would not win the process of this legislation of removing these parts of the Bill or of putting in an amendment along the lines of that proposed by the noble Lord, Lord Whitty, which I would otherwise strongly support.
	To help the Government, in these discussions we are looking for some compromise that at the very least provides a backstop so that, if any of these designated persons are not helpful and try to resist or are just incompetent in passing on a complaint, the tenant can nevertheless go direct to the housing ombudsman. It is a slightly messy process and it is not as good as now, but it can work and at the very least would maintain their right to go direct to make the complaint, even if someone else tries to persuade them otherwise or to block it.

Lord Whitty: My Lords, does not the noble Lord accept that if a tenant has reservations about their circumstances, which may be very personal, it is not just a question of whether if they go to them they may be rebuffed, but that they would be seriously inhibited about going to their councillor or their tenants' panel, or possibly even their MP, in the first place? We should take that into account.

Lord Greaves: Yes, I accept that and I think the noble Lord is quite right. All I would say is that I would expect that most Members of Parliament are used to dealing with that kind of sensitive information, and if they are not, they are not fit to be Members of Parliament. I think also that there are councillors who are prepared to help and are experienced in dealing with that kind of information. I do not entirely take the view of the noble Baroness, Lady Hayter, that they have to be skilled in the processes of assessment, conciliation and so on. All they have really got to do is say, "You have a reasonable case. I will sign this and you can send it on".
	The objections to going to a councillor can be overstated. As the noble Lord said, the legislation states that you can go to any member of the housing authority, so you will have a choice of 40, 50 or 60 people to approach. I would have thought someone could be found who would pass it on, and not necessarily knowing all the details. Sometimes people come to me as a councillor and say, "I want to tell you all about this". I say, "Look, I am not an expert in this. It seems to be very personal and I really do not want to know. What I will do is put you in touch with the people who can help you and with the authorities who might be able to sort it out". So I think that this can be overstated.
	Nevertheless, we are absolutely clear that we would like to support an amendment along the lines of that tabled by the noble Lord, Lord Whitty. We have a compromise amendment in an attempt to help the Government to resolve this in a way that is not as damaging as perhaps it otherwise would be, and perhaps not very damaging at all. However, we would really like an assurance from my noble friend the Minister that between now and Third Reading she will think seriously about this so that it can be considered again at that stage, either through a government amendment along the lines of our amendment or perhaps something a bit better. That is the assurance we are looking for and I hope that she will be able to give it. I should say that if we get it, I will not move my amendments when we get to them later on.

Lord Kennedy of Southwark: My Lords, I am pleased to support my noble friend Lady Hayter of Kentish Town in the amendment she has moved in respect of the Housing Ombudsman. I have known my noble friend for many years and we have worked together on numerous matters. As usual, she has hit the nail on the head, identified the problem and provided us with a sensible and reasoned solution which I think should command widespread support across the House. The Housing Ombudsman provides a free, independent and impartial service to the tenants of social housing providers. It is a respected organisation which provides resolutions for problems as well as valuable advice and guidance to the providers of social housing on how to get it right by developing effective complaints procedures.
	As noble Lords are aware, tenants currently have the right to complain to and deal directly with the Housing Ombudsman where a complaint has not been resolved to their satisfaction. The Government propose to take away a tenant's right to make a direct complaint to the Housing Ombudsman. That is just wrong. It serves no purpose other than making matters more complicated for everyone concerned, and especially for tenants, who will feel that they have already suffered an injustice and are seeking independent redress for their complaint. If this amendment is not accepted, as we have heard today, tenants will in future have to go through their local Member of Parliament, a local councillor or a tenants' panel. Again, that is wrong. If the tenant wants their MP or local councillor to be fully involved and to make the complaint or support them, that is absolutely fine. I would welcome that. But to take away an individual's choice in this matter is bizarre in the extreme. Can the Minister tell the House why the Government think that this is the right approach? Also, what happens if the local MP or councillor refuses to take the matter to the Housing Ombudsman? Where can the tenant go then?
	There is also a practicality issue in that, in more cases than not, the complaints the Housing Ombudsman deals with are complex issues, often evolving over many months or years. Local MPs or councillors, who are working hard for their constituents, may not have the capacity in their offices or the town hall to deal with these complex matters as effectively as the ombudsman could. No criticism of anyone is intended-it is just an observation. In conclusion, I congratulate my noble friend on bringing this matter forward and other noble Lords who have spoken in support of this amendment, and I ask the noble Baroness, Lady Hanham, to think again and accept my noble friend's proposal.

Baroness Hanham: My Lords, it has been a very interesting and helpful debate, mostly coming from people who understand the process in place at the moment. There has been a lot of talk about arbitration. However, this is not about arbitration; it is about resolution. It is about somebody having a problem and needing it resolved. They need somebody to write a letter to the housing chairman. They need somebody to write a letter because they have been through the process and they have not got a reasonable answer. As former councillors, we have all done precisely this and made sure that there is some means of resolving a problem for tenants. To say that councillors, MPs, and now tenants cannot do this seems absurd.
	One of the reasons for suggesting that people take their complaints through one of those filters-if that is what they are-is, as my noble friend Lord Tope said, that there is a strong belief that removing housing by and large from the direct control and interest of councils and taking it to ALMOs and housing associations means that councillors and MPs become disconnected from the problems. Councillors in particular ought to know what is going on in the housing stock in their borough. I am sure the noble Baroness, Lady Hollis, knows exactly what she is doing and has a very good complaints procedure. I am not sure that is true of every ALMO or even of the way council properties are run. So we want to reconnect councillors and MPs with what is going wrong within their area. Can we dump the suggestion of arbitration? Nobody is asking them to arbitrate. We are asking them to resolve a problem. If they cannot resolve the problem, they would be required to pass the matter on to the Local Government Ombudsman with the agreement of the complainant.
	I do not want there to be any misunderstanding. We recognise that the Housing Ombudsman does an extremely good job. There is no doubt about that. It is responsive and it knows what it is doing. This is not about trying to exclude the ombudsman from the system. But the Housing Ombudsman has an enormous case load which went up by 72 per cent between 2007-08 and 2009-10. Maybe that reflects the fact that there are more complaints coming forward about housing, which could be dealt with locally if there was the opportunity to do so. An additional 11 per cent of complaints have been made in the past year.
	We want to ensure that the ombudsman is not the first port of call. We do not want the immediate response to be, "Oh, I'm going off to the ombudsman". There should be a step before that; namely, going to one's tenants panel, a councillor or an MP and seeing whether the matter can first be resolved through them.
	A dual-track model currently applies to complaints to the Local Government Ombudsman. In practice, although the ombudsman does not collect detailed statistics, complaints are almost always submitted directly to the ombudsman and not via local councillors. Therefore, we are not convinced that this model will help local complaint resolution.
	I have listened carefully to what has been said and I know that these matters have been raised over a number of weeks. I understand what has been said about discussions passing a last barrier point between the council or tenants panel to the ombudsman. I am not clear that dual track increases the number of ways of resolving complaints, but I have heard what has been said. Bearing in mind what was said by the noble Lords, Lord Greaves and Lord Tope, and my noble friends Lord True and Lady Eaton, who all see the advantage of an initial stage, I am happy to look again at the second stage and how a matter would get to the ombudsman. I give a commitment to do that before the next stage of the Bill so that we can discuss how we think that could take over. We feel that this would be a good way to proceed. I hope that both my noble friends and the noble Lords opposite will be content for us to see whether there is a way through here without absolutely undermining the provisions that the Government wish to introduce. The Government believe that local people who are associated with local housing and have become disconnected from it should be aware of what is going on and be capable of dealing with a lot of the problems that tenants have without them having to approach the ombudsman.
	My offer is one of discussions to see whether there is a way through. If we have not found one by Third Reading, we will be able to deal with the matter then. On that basis, I hope that noble Lords will not press their amendments.

Lord Kennedy of Southwark: My Lords, does the Minister accept that what has been proposed would enable tenants to keep their right to decide whether they want to go through their councillor or MP or go directly to the ombudsman? What the Government are proposing denies them that choice. That is the problem that we have on this side of the House.

Baroness Hanham: My Lords, I do not think that it denies them the choice. I am happy to look into how the passing from one to the other can be done. We think that there should be an initial stage. Often, those initial stages work: a councillor intervenes; they see what is going on; and the matter is resolved at that level. If that does not happen and somebody goes directly to the ombudsman, it is very difficult for councillors and tenants panels to know exactly what people are thinking. People do not always want to go to the ombudsman and would quite like somebody to deal with the matter at a local level. That is why we think the initial responsibility for getting matters put right lies with one of those three groups. I am very happy to look at how we can deal with the question of whether it is a requirement for the MP or local councillor to be the final arbiter of when a matter is passed on to the local ombudsman.

Baroness Hayter of Kentish Town: My Lords, I thank the Minister for her response and, indeed, I thank all noble Lords who have spoken. We all support the idea that the service provider should be the first person to solve the matter and that there should be good ways of doing so. We all prefer local resolution and we all want councillor involvement. I do not think that there is anything between us on that. The only difference is in whether an extra layer should be added and whether we want a veto regarding whether people can, after that extra layer, go to the Housing Ombudsman.
	Obviously I am addressing myself to those who I think have already reached a compromise. I hope that they have not, because some problems remain with the amendments, which may not now be moved. One, which has not yet been covered, is that the complaint is still required to be made in writing. Part of our amendment was intended to remove that requirement. I realise that we are on Report rather than in Committee, and therefore that may be a possibility. However, it would be a new statutory requirement. It would go against good practice and, indeed, the Law Commission has specifically recommended against it. Its latest report on public service ombudsmen states:
	"We recommend that all formal, statutory requirements that complaints submitted to the public service ombudsmen be written are repealed".
	That is because of vulnerable consumers.

Lord Greaves: Does the noble Baroness accept that our amendments are not intended to be a perfect answer? We tabled them to persuade the Minister and the Government not to resolve the matter finally today but to give us more time to discuss it before Third Reading and perhaps to come to a resolution that might be agreed around the House at Third Reading. The Minister has given a very clear assurance that that will now happen. The matter can be brought back at Third Reading and, on that basis, I wonder whether the noble Baroness will withdraw her amendment.

Baroness Hayter of Kentish Town: The problem that remains-and I shall explain why I think there is still a problem-is the Minister's final response, in which she did not give an assurance that the same right will remain for social housing tenants as exists for every other ombudsman-that of direct access to the ombudsman for justice without having a filter.
	I should like to say one other thing about what I understand was an attempt to find a way through. Procedurally, I think that it is a bit of a nonsense to say that you must go to your MP or councillor in order to be able to go to the Housing Ombudsman but that if they say no, you can still go anyway. I accept that the wording was an attempt to get through this afternoon's discussion but it is a bit of a nonsense to say, "Go through your MP but, if they say no, you have an automatic right to go anyway". That does not seem to represent progress; nor does it remove the extra layer. If the councillor or MP is to become involved, they have to carry out another inquiry-they have to hear both sides of the case. That is all that I mean by natural justice. I believe that councillors and MPs are champions of their electors but I do not think that they are adjudicators. I deliberately use the words "adjudication" or "resolution". In other words, they resolve a problem where someone else cannot, and coming in with a fresh mind rather than being a champion seems to be very important. I believe that it would be a form of discrimination to say that just one group could not go directly to an ombudsman. The noble Lord, Lord Best, chairs the Property Ombudsman service. I was a member of the Surveyors Ombudsman Service. In all these cases, people are allowed direct access to an ombudsman.
	This is a serious matter regarding justice and I should like to test the opinion of the House.

Division on Amendment 52A
	Contents 183; Not-Contents 207.
	Amendment 52A disagreed.

Amendment 52B
	 Moved by Lord Kennedy of Southwark
	52B: Clause 163, page 152, line 8, at end insert-
	"( ) In section 36 of the Housing and Regeneration Act 2008 (information in relation to social housing) in subsection (1) after paragraph (c) insert-
	"(d) any accreditation or standards to be held by landlords of social housing.""

Lord Kennedy of Southwark: My Lords, in moving Amendment 52B, I shall speak also to Amendment 85. During the course of deliberations in this housing section of the Localism Bill, we have referred on a number of occasions to the private rented sector, which plays an important role in providing accommodation to individuals, couples and families. There are some excellent private sector landlords-there is no doubt about that. We should always be concerned with driving up standards and making provision better for all. Good quality housing that meets the needs of tenants in the private rented sector is an aim we can all sign up to.
	However, as with all types of housing, there are landlords who are not quite as good as they should be, and property that is not up to the standard that it should be. The proposal for a landlord accreditation scheme is an attempt to address this serious problem. The proposal is for local authorities to operate one or more voluntary-and I stress the word voluntary-landlord accreditation scheme. The amendment also gives the Secretary of State the power, if he wishes to use it, to make regulations in this respect, in consultation with the local authorities. This proposal will have the effect, when the schemes are operating, of highlighting the good landlords-those who manage their properties well, deal with their tenants properly and provide a reasonable product for a fair price. That will give tenants more confidence, as they can have information on the landlords on the scheme and have a procedure for taking action if they are found wanting. It will also shine much needed light on those landlords who do not always come up to the mark and in a number of areas can be found wanting, who are letting down their tenants and providing a poor product for what they are charging. Those landlords will be registered and shown to be poor or, because they offer a poor product, they will seek to avoid participation in the voluntary scheme.
	If the Minister is not prepared to accept my amendment, can he give us an assurance that the department will keep the matter under review, as this is a genuine attempt to address a problem which we know all too well exists. I beg to move.

Earl Attlee: My Lords, these amendments focus on the potential impact of accreditation schemes, both in the private rented sector and the social rented sector. I turn to the social rented sector first.
	Amendment 52B would give the Secretary of State the power to require the Homes and Communities Agency, and from April 2012 the Greater London Authority, to supply information about any accreditation or standards to be held by landlords of social housing. I assume that the amendment relates to the HCA's future role as a regulator of social housing. The noble Lord nods. However, under the Housing and Regeneration Act 2008 the regulator is already obliged to consult on its own standards for social housing landlords and to bring those standards to landlords' attention. In practice, of course, the regulator's standards are freely available for everyone to view on its website, so I do not see a need to empower the Secretary of State to require that this information is published by law.
	The amendment could also encompass accreditation or codes that might be adopted by social landlords on a voluntary basis. It is important that this kind of voluntary activity is owned by the sector itself, so I am not convinced that the regulator should be required to publish information about it. Indeed it is important that there is a very clear distinction between the regulator's standards, which are compulsory, and any codes or accreditation arrangements that are adopted by landlords on a voluntary basis. Of course, we would encourage such voluntary activity in the sector, but we do not believe that it would be helpful for the regulator to police it or to report on it.
	Turning to Amendment 85, which deals with accreditation in the private rented sector, I think that we all agree that a good accreditation scheme can play an important role in developing a local authority's relationship with their local landlords. Many local authorities already run successful accreditation schemes, but as with the social sector, accreditation works best when it is owned by those involved. One of the main strengths of voluntary accreditation to date is that local authorities have been able to tailor their schemes to local needs, and experience shows that accreditation works best when it matches local circumstances.
	Instead of allowing that local discretion, the proposals in front of us today would impose top-down burdens on all local authorities, including those who, quite legitimately, decide that accreditation is not appropriate for their area. Worse, they would force all existing and effective accreditation schemes into a straitjacket designed by central government. Schemes that did not match up would have to be, quite pointlessly, dismantled and reassembled at considerable administrative cost. This does not seem to make much sense and we cannot support it.
	My Lords, these amendments are intended to support accreditation-and the noble Lord explained why he believes them necessary-but unfortunately they would have the opposite effect by undermining effective schemes that are already in place. Given this, I would ask the noble Lord to withdraw his amendment.

Lord Kennedy of Southwark: My Lords, I thank the noble Earl for his reply. However, I still think that there is an issue here that needs further consideration, so I hope that this will be kept under review. That said, I beg leave to withdraw the amendment.
	Amendment 52B withdrawn.
	Amendment 53 not moved.
	Amendment 54
	 Moved by Lord Best
	54: Clause 163, leave out Clause 163

Lord Best: Amendment 54 is in the name of the noble Lord, Lord Kennedy and myself. Currently, the Secretary of State is able to direct the regulator to set standards for social housing in certain areas. In a strictly limited number of cases, he is able to direct the content of these standards. Clause 163 of the Localism Bill seeks to strengthen his powers in this area, allowing him to shape the contents of standards regarding tenancy exchanges in which tenants can swap properties. The view within the housing world is that this is giving the Minister too many powers to direct the behaviour of social landlords. The danger of accumulating more and more powers in the hands of the Secretary of State is that eventually, as one Minister after another brings their own fresh and no doubt good ideas to bear, you are effectively nationalising the housing associations; they are becoming creatures of government. They then run the risk of being regarded by the EU and others as public sector bodies. If the housing associations are no longer independent bodies and are regarded as public sector agencies, then all their borrowing becomes public sector debt and we have lost one of the key elements in having a social housing sector that is outside of public sector control.
	So I am very sympathetic to standards about exchanges and the mobility of labour, and to the Minister's hopes that housing associations will behave in a particular way, but laying this down, through direction to the regulator over these standards, does seem a step too far. I beg to move.

Earl Attlee: My Lords, Clause 163 is important in increasing mobility for social housing tenants who may wish to move for work, or to give care to or receive care from family or friends. We want to increase opportunities for tenants to move through mutual exchange. We have been working with the existing main providers of home-swap services to develop a technical solution that will put in place a national scheme that enables tenants to receive information on all possible matches across all providers in a scheme. Alongside this, we want all landlords to be required to provide their tenants with access to good internet-based home-swap services. Indeed, the majority of landlords who responded to our consultation on housing reform also agreed with this approach and said they could see no good reason why landlords should not subscribe to such a scheme. We therefore propose, through using the powers in this clause, that the social housing regulator should set a mutual exchange standard to make sure that social landlords sign up to good-quality services.
	The noble Lord also raised the issue of public sector debt. While I am not undertaking to reflect on that and come back at a later stage, I will undertake to satisfy myself, through discussions with my officials, that the problem which the noble Lord alludes to does not exist. While I accept that some noble Lords view this as an overly bureaucratic approach, we believe that the benefits of increasing choice and mobility for social tenants must be the priority and that we should seek to deliver this better service for them.

Lord Best: I am grateful to the noble Earl for that response. I agree entirely that improving mobility and exchange schemes is a thoroughly commendable line to pursue. I think that I am now on my 23rd housing Minister since I started in this world. They have all had important ideas to add to the things that housing associations ought to do; it is just that in the end, if one is not careful, the cumulative effect is the creation of an agency that is simply a government bureaucracy. I am grateful for the noble Earl's reassurances and beg leave to withdraw the amendment.
	Amendment 54 withdrawn.
	Schedule 16 : Transfer of functions from the Office for Tenants and Social Landlords to the Homes and Communities Agency
	Amendment 55
	 Moved by Lord Kennedy of Southwark
	55: Schedule 16, page 374, line 4, after "means" insert "the Regulation officer of"

Lord Kennedy of Southwark: My Lords, I will be as brief as possible in speaking to this group of amendments. My Amendment 55 seeks to designate an individual within the Homes and Communities Agency to be responsible for regulation. The amendment has the support of the National Housing Federation, and it is important because it seeks to avoid a conflict of interest between the HCA's regulatory and investment functions. It will help to ensure that regulatory issues can be addressed, even to the extent of formal legal proceedings, without compromising the investment function of the HCA, and vice versa. The HCA would of course still be required to appoint a regulatory committee to oversee the regulation officer. The Government may say that this proposal will diminish rather than enhance regulatory independence but I do not accept that that is the case at all. I am in fact arguing the exact opposite. If that is the Government's position, I hope that the noble Earl will be able to give the House additional words of assurance on this matter. I beg to move.

Earl Attlee: My Lords, I am grateful for the way in which the noble Lord, Lord Kennedy of Southwark, succinctly moved his amendment. The Government are committed to ensuring the continued independence of the regulatory function once it transfers to the Homes and Communities Agency. However, our view is that the nomination of a single individual as a regulation officer would diminish rather than enhance regulatory independence. Rather than vesting the regulation function in an independent committee, these amendments, as the noble Lord explained, would confer the statutory powers on a single member of the HCA's staff. In moving his amendment, the noble Lord talked about the problem of a conflict of interest. However, this person could presumably be dismissed at any time by the HCA on normal employment grounds. It could prove difficult for a member of staff in that position to take decisions that were demonstrably independent of the HCA's other functions. In addition, where formal regulatory decisions are made by a properly constituted board or committee, there can be greater confidence that those decisions are broadly based and take account of the full range of relevant factors. I hope that the noble Lord will feel able to withdraw his amendment in view of my explanation.

Lord Kennedy of Southwark: My Lords, I thank the noble Earl for his response. Clearly we are not going to agree on this. Nevertheless, I beg leave to withdraw the amendment.
	Amendment 55 withdrawn.
	Amendments 56 to 59 not moved.
	Amendment 60
	 Moved by Lord Best
	60: Schedule 16, page 375, line 33, leave out ", unfit or unsuitable" and insert "or unfit"

Lord Best: My Lords, this amendment concerns the terms of appointment of members for the new regulation committee. The intention is that "unsuitable" should be removed so that those who are indeed unfit or unable to serve could be removed by the Secretary of State but not those whom the Secretary of State deems to be unsuitable. That is extending the power a step too far-again, a theme of the amendments that I am bringing forward. "Unsuitable" could imply people being removed from office on grounds that would be comprehensible to the Secretary of State. It would not ensure the independence of those people to argue and, if necessary, to be a nuisance within that committee. They might do that in fear that they would be regarded as unsuitable somewhere down the line.
	The Bank of England's Monetary Policy Committee uses the terms unable and unfit to describe the powers for the removal of any members of that committee. Those words would seem sufficient for the regulation committee as much as for the Monetary Policy Committee, which has done well and which has had some members who have been quite happy to raise objections-and to be quite forceful in doing so-but who might have been regarded as unsuitable if there had been powers of ministerial intervention. This amendment simply seeks to lose "unsuitable". I beg to move.

Lord Newton of Braintree: My Lords, I cannot resist it, especially since I am well known to be classified as unsuitable by my Front Bench. I have some sympathy with the argument that has just been advanced. It is quite difficult to see what is not included in "unable" or "unfit" that is then covered by "unsuitable" that ought not to be covered. It depends on matters of judgment that could include political or personal judgment that would not be a proper consideration. I just want to know what is thought to be desirably covered by unsuitable that is not covered by the other words.

Lord Kennedy of Southwark: My Lords, the Opposition fully support the amendment moved by the noble Lord, Lord Best. The amendment seeks to correct the use of what can only be described as an odd and unnecessary use of the term unsuitable. Like the noble Lord, Lord Newton, we ask the Minister to address that specific point of why unsuitable is being used. There is much concern that the Government are taking a much wider view and a much wider power and have additional intentions of using it. I hope that the Minister either accepts the amendment or that we have a very clear explanation about what this does and does not mean.
	The Secretary of State already has the power to remove someone who is unable or unfit. As the noble Lord, Lord Best, said, this is adequate for the Monetary Policy Committee of the Bank of England, so we on this side certainly think that it is good enough for the HCA regulation committee.

Earl Attlee: My Lords, it is important that the regulation committee is able to function effectively in order to retain the confidence of investors and the social housing sector. In extreme cases, it may prove necessary for the Secretary of State to intervene to remove a member of the committee to ensure that its crucial work is not jeopardised. "Unable, unfit or unsuitable" are fairly standard grounds and a nearly identical provision exists for membership of the boards of the existing social housing regulator and the Homes and Communities Agency.
	In answer to my noble friend Lord Newton of Braintree and the noble Lord, Lord Kennedy of Southwark, a member may be able and fit to carry out his or her functions without being suitable to exercise them. This might arise, for example, if there was an irretrievable breakdown in the relationship between the member and the rest of the committee. A member might engage in activities such as filibustering deliberately to disrupt the committee's work, but that falls short of being "unfit". He would be being very effective in disrupting the work of the committee, so I am sure that noble Lords can understand the need for "unsuitable".
	Government Amendment 61 is a minor amendment that will update the Housing (Scotland) Act 2010 and the Equality Act 2010 to reflect the planned abolition of the Tenant Services Authority.

Lord Kennedy of Southwark: My Lords, before the noble Earl sits down, does he see the problem that we on this side see: that somebody can be deemed unsuitable just because they are making a point that the others happen not to agree with? It is not filibustering but that they are making a perfectly valid point, which is not agreed with.

Earl Attlee: No, my Lords, that would not meet the test of what is unsuitable. If the Secretary of State tried to use his powers to say that someone was unsuitable because he or she disagreed with other members of the committee, he would leave himself vulnerable to judicial review.

Lord Kennedy of Southwark: Would the noble Earl like to suggest the number of times you have to disagree before you are deemed to be unsuitable?

Earl Attlee: My Lords, I would imagine that a committee could have very free and frank discussions, perhaps lasting all afternoon, without falling foul of the test of unsuitability. On the other hand, if a member of the committee regularly interfered with the operation of the committee so that it could not function, the Secretary of State would have to step in.

Lord Best: My Lords, I will certainly not press the matter further. However, it is important for the Government to know that the housing sector is very concerned that this regulation committee is independent and that the people on it feel able to say things that are contrary to what the Government might wish to hear. That independence is paramount. I hope that that point has been taken. I beg leave to withdraw the amendment.
	Amendment 60 withdrawn.
	Amendment 61
	 Moved by Baroness Hanham
	61: Schedule 16, page 381, line 15, at end insert-
	"Housing (Scotland) Act 2010 (asp 17)
	59A The Housing (Scotland) Act 2010 is amended as follows.
	59B In section 18(2) (co-operation with other regulators: definition of "relevant regulators") in paragraph (a) for "the Office for Tenants and Social Landlords" substitute "the Regulator of Social Housing".
	59C In section 68(3) (determination of accounting requirements for registered social landlords: consultation with other bodies) in paragraph (c) for "the Office for Tenants and Social Landlords" substitute "the Regulator of Social Housing".
	Equality Act 2010 (c. 15)
	59D In Schedule 19 to the Equality Act 2010 (public authorities) omit the entry for the Office for Tenants and Social Landlords."
	Amendment 61 agreed.
	Amendment 62
	 Moved by Lord Shipley
	62: After Clause 166, insert the following new Clause-
	"Transfer of trusteeship of almshouses
	In section 170 of the Housing and Regeneration Act 2008 (overview) at the end insert-
	"(2) For the purposes of this Chapter, "disposal of property" shall include the transfer of trusteeship of an almshouse by a registered provider where, as a result of that trusteeship, the registered provider manages land or dwellings; and "disposal of land" and "disposal of a dwelling" shall be interpreted so as to refer to the transfer of trusteeship which entails management of land or dwellings accordingly.""

Lord Shipley: Amendment 62 relates to the transfer of trusteeship of almshouses. I am grateful to my noble friend the Minister for writing to me in the Recess to say that she was sympathetic to the case for this amendment and would be happy to consider the matter and discuss it further even though there was a need to be cautious about extending the scope of state regulation in relation to charitable bodies. I hope that discussions can continue between today and Third Reading.
	At present, if a regulated housing association sells occupied social housing, that housing association requires the consent of the regulator, who in turn requires the housing association to consult its tenants. By contrast, when the control of an almshouse is moved from one corporate trustee to another, the ownership of the property remains with the Official Custodian for Charities. For that reason the regulator's consent is not required for the change even if the residents' homes are in effect being sold against their express wishes. The amendment would ensure that if a registered provider wanted to transfer the trusteeship of occupied dwellings, the consent of the regulator would be required. The regulator could in turn require the housing association to consult residents.
	I move this amendment because a housing trust-the Anchor Trust-is transferring the corporate trusteeship of 11 almshouses spread through London and south-east England to another charity. Many residents oppose this proposal and would prefer to be transferred to a more local charity instead. The issue here is about the rights of tenants. If this was a stock transfer, say, of local authority housing, tenants would have the right to be consulted and, indeed, to give their consent to a transfer of their properties. The question that lies at the heart of this is: if there has to be consultation and consent given for a stock transfer, why when almshouses are being transferred is there not to be full consultation and consent? The legal situation is complicated because of the charitable status of the almshouses. I understand that in this specific case there have been meetings between Members of Parliament and the chief executive of the Anchor Trust and with the Charity Commissioners. However, we need to address this issue in Parliament because I cannot see why a different system should apply to tenants of almshouses as opposed to tenants in other forms of social housing.
	I recognise the need for further work to be done on the legal issues. I also recognise that we are still on Report. However, I hope that there is time to look further at those legal issues to see what might be done about this situation. In the mean time, I hope that it might be possible for full consultation and consent to be obtained from those tenants affected by this and any other proposed transfer of almshouses. I hope that it will be possible for that further work to be presented to your Lordships' House at Third Reading.

Lord Kennedy of Southwark: My Lords, I offer my support and that of the Opposition to the noble Lord, Lord Shipley, as I have done on a number of occasions on Report. He has identified a problem that needs to be addressed. It involves real people with real concerns. If the matter requires further work, as he says, and it can be done-I hope that the Minister will comment on that-the issue may be sorted out. Given that we are discussing a charity, I understand that the issue may be more difficult than it at first seems, but I hope that the government Front Bench will give a positive response.
	Amendments 65 and 67 in this group stand in my name. Amendment 65 would ensure that a parent company of a group of housing associations can be registered even if it owns no housing itself. This would allow the regulator to regulate group members via the parent rather than directly if he thinks that that would be more effective. Amendment 67 concerns the appointment of members to housing association boards. The law as it stands allows the regulator to make unlimited appointments to a registered provider's governing body provided that they remain a minority. For a 10-member board, it would allow the regulator to make nine appointments. My amendment limits the number of appointments the regulator may make to no more than four. This is a proportionate number of appointments and would enable the regulator to strengthen the board by adding members with sufficient skills and abilities to deal with any concerns that they may have about the board's performance. However, the number would not be too overbearing as this sort of appointment would be of a temporary nature to help the housing association board discharge its duties more effectively.

Lord Best: Amendment 67 stands in my name and that of the noble Lord, Lord Kennedy. It concerns the appointments made by the regulator. It is important to note that this amendment relates only to appointments made by the regulator where the housing association has not failed in any way. It is not a disciplinary measure but constitutes a voluntary helping hand for the organisation. In a number of cases that I know well additional members have been appointed by the regulator as new members of the board and have been very helpful. However, there are limits to the number of appointments that the regulator ought to make to the board. We suggest that these be limited in future to a maximum of four. In my experience three new people are usually appointed to strengthen a board that has become weak-four is quite enough. We are trying to protect the independence and sovereignty of these organisations.

Earl Attlee: My Lords, as regards the amendment moved by my noble friend Lord Shipley, I recognise the strength of local feeling in the case that he highlighted. We have looked at his proposal extremely carefully and have discussed it with the social housing regulator, the Charity Commission, the National Almshouse Association and the National Housing Federation. We have also received helpful representations from the United St Saviour's Charity and from residents of the Hopton's Almshouses in Southwark.
	I fully understand the reasoning behind the proposed amendment. However, we are concerned that the amendment seems to require an increase in bureaucracy and potential state interference in the proper exercise of charity trustees' discretion. Currently, the identification of a new trustee is a matter for the existing trustee to decide and we are not convinced that new regulatory controls should be applied. The proposed amendment would apply only where the corporate trustee of an almshouse happens to be a registered provider of social housing. It is not clear that there is a strong rationale for requiring that these almshouse trustees, but not others, seek consent.
	Registered providers are subject to a regulatory requirement to consult tenants on changes to management arrangements, and the Charity Commission's consent is required for changes to charities' objects. My noble friend tempted to me to say something about Third Reading, but I am not convinced that there is anything more that we can do with this Bill, so I shall resist that temptation. However, I suspect that this will be a live issue for some time to come. Our expectation is that, as a matter of good practice, housing associations should and would consult any residents affected by significant management changes that they are proposing to make.
	Amendment 65 was tabled by the noble Lord, Lord Kennedy of Southwark. A transitional provision is already in place that allows non-stock-owning group parents to remain on the regulator's register, despite the fact that they are not social housing landlords as defined by the Housing and Regeneration Act 2008. In order to minimise uncertainty, I am happy to confirm that the Government have no plans to withdraw this provision. However I am not convinced that the regulator should be able to register new bodies that do not meet the landlord test provided by the 2008 Act. It is not clear that there is anything fundamentally wrong with the principle that regulation should apply to the landlord of the stock. This approach is consistent with wider legislation, which usually imposes legal obligations on landlords rather than on any parent companies they may have.
	Amendment 67 was tabled by the noble Lords, Lord Best and Lord Kennedy of Southwark. The existing legislation provides that the regulator may not normally appoint more than a minority of the officers of a registered provider. I am not convinced that removing this restriction and replacing it with a prohibition on the regulator appointing more than four officers would strengthen housing association independence. In fact, it could well have the opposite effect. It is entirely possible that a housing association may have seven or fewer officers and, where this is the case, the amendment would effectively give the regulator the power to appoint a majority of the association's officers.
	I am also concerned that this change could reduce the effectiveness of the regulator's response to a serious problem in an association. For example, where an association has no officers, as has occurred in the past, but its constitution does not specify a minimum number of officers, the amendment would permit the regulator to make up to four appointments only. That may not be sufficient to put things right and protect tenants and the taxpayer.

Lord Kennedy of Southwark: I know that the Minister was not tempted by the noble Lord, Lord Shipley, but can he give the House any assurance that the issue the noble Lord raised will be looked at seriously by the Government? I accept that this involves charity law, which is complicated stuff, but it also involves real people with real concerns and the Government should look at this seriously.

Earl Attlee: My Lords, I am confident that my department will continue to monitor the situation, but we cannot do anything further with this Bill.

Lord Shipley: Will it be possible for the evidence that the Minister referred to from the regulator, the Charity Commission and other bodies to be provided in the Library so that we can see exactly what evidence they have supplied to the Government that indicates that legally this is very complicated? Would the Minister agree that it would be good practice for consent to be received where a transfer is being proposed for almshouses? Would he consider and give advice on what other steps could be taken to ensure that consent for transfer from tenants is delivered?

Earl Attlee: With regard to the evidence, if I can give the noble Lord some more evidence I will, but I am not certain that I can. I believe there are some difficulties with his second request.

Lord Kennedy of Southwark: Before the Minister sits down, I shall press him on this point. In order to get time for this to be resolved, would he be able to facilitate a discussion between representatives of these organisations, the almshouses and their residents with officials and Ministers in the department?

Earl Attlee: My Lords, we will do whatever we can to assist a resolution of this problem. We will continue to monitor it, but my particular point is that there is not much more we can do with this Bill.

Lord Shipley: My Lords, when I moved Amendment 62, I quoted from the Minister's letter which said that she was sympathetic to this case, so I am pleased that we seem to have ended on a note of sympathy and understanding of the problem. I think we need to try to find a solution to this. I repeat myself, but I do not think it is tenable for tenants of almshouses to be treated differently from tenants of other social housing or local housing. There is a principle at stake here. There may be legal complexities to deal with in this Bill, but I am very grateful for the assurance from the Minister that we can enter further discussions prior to Third Reading.

Earl Attlee: My Lords, I said that we cannot enter further discussions. We cannot use this Bill to solve this problem. I gave no such undertaking.

Lord Shipley: I understand the point that the Minister is making-that this Bill may not be the right forum for progressing the issue-but there will nevertheless be discussions about how the issue might be progressed in other ways.

Earl Attlee: My Lords, we are happy to continue work to resolve the issue, but not with this Bill.

Lord Shipley: I understand that situation. With that confirmation, I beg leave to withdraw the amendment.
	Amendment 62 withdrawn.
	Schedule 17 : Regulation of social housing
	Amendment 63
	 Moved by Earl Attlee
	63: Schedule 17, page 384, line 33, at end insert-
	"1A In section 122 (restriction on gifts and distributions by non-profit registered providers to members etc) after subsection (6) insert-
	"(7) The Secretary of State may by order amend this section for the purpose of-
	(a) adding to the permitted classes, or
	(b) modifying or removing a permitted class added by order under this subsection.
	(8) Before making an order under subsection (7), the Secretary of State must consult-
	(a) the Charity Commission,
	(b) the regulator, and
	(c) one or more bodies appearing to the Secretary of State to represent the interests of registered providers.""

Earl Attlee: My Lords, in Committee, the noble Lords, Lord Best, Lord Patel, Lord McKenzie and Lord Beecham, tabled an amendment designed to liberalise Section 122 of the Housing and Regeneration Act 2008, which restricts the payments that housing associations may make to their members, and a similar amendment has been tabled again by the noble Lord, Lord Best.
	The Government agree with the aim of the amendment and have put down our own amendments to achieve it. The amendments we have tabled would give the Secretary of State the power, by affirmative order, to add to the classes of permitted payments that housing associations may make to their members. Taking this matter out of the Bill will give us sufficient time to explore a new exemption that delivers greater flexibility while protecting public investment. Any order would be made only following consultation with the Charity Commission, the regulator and the housing association sector. I beg to move.

Lord Best: I am very grateful to the Minister for what he has just said. There has been a problem here, but it sounds as though it is well on the way to resolution. I am very happy not to move Amendment 64.

Lord McKenzie of Luton: We are grateful to the Government for responding to the earlier amendment. I acknowledge that the noble Lord, Lord Best, will not move his amendment, but are classes 4 and 5 specified in that amendment classes that the Government would support and take forward under the process that they have set down?
	Amendment 63 refers to,
	"modifying or removing a permitted class added by order under this subsection".
	Do the Government have anything in mind concerning modifying or removing a particular class?

Earl Attlee: My Lords, those are exceptionally good questions, but unfortunately I will have to write to the noble Lord.
	Amendment 63 agreed.
	Amendments 64 and 65 not moved.
	Amendment 66
	 Moved by Earl Attlee
	66: Schedule 17, page 388, line 13, at end insert-
	"17 In section 320 of the Housing and Regeneration Act 2008 (orders and regulations)-
	(a) in subsection (3)(a) (orders subject to approval in draft by each House of Parliament), after "114" insert ", 122", and
	(b) in subsection (7)(a) (orders subject to annulment by either House of Parliament, and exceptions from that requirement), after "114" insert ", 122"."
	Amendment 66 agreed.
	Amendment 67 not moved.
	Clause 167 : Housing complaints
	Amendments 68 to 73 not moved.
	Amendment 73A
	 Moved by Lord Greaves
	73A: Clause 167, page 153, line 35, at end insert-
	"(3A) If a designated person who is asked to refer a complaint to a housing ombudsman declines to refer that complaint, the individual making the complaint may make it directly in writing to that housing ombudsman."

Lord Greaves: My Lords, we discussed this issue at some length when debating a previous group of amendments. The Minister gave a clear assurance that we can have discussions before Third Reading. I hope that we can come to some consensus. On that basis, there is nothing more that I need to say.

Baroness Hanham: My Lords, I am in an interesting position. I offered discussions when debating the last group of amendments, but the offer was rejected forcibly by the vote. I have now been asked whether I will have discussions on these amendments, and I am happy to say that I am content to have them.

Lord Greaves: I think that that was an acceptable answer. I understand that we cannot bring back the amendment that was defeated in the vote, but there are plenty of things in these amendments that we can talk about in relation to what the Bill states. That gives us sufficient leeway to talk about what we want to talk about. Whether the Government will extend their offer of discussions to the Opposition, who rudely threw it back in their face on the previous group of amendments, I do not know. I would welcome their participation, but that is up to the Government.

Lord McKenzie of Luton: Perhaps I may make it clear that we voted on the original proposition because we believed that it would secure the best outcome. As that did not succeed, it is not inconsistent to want to see a lesser position that nevertheless improves on what is in the Bill. That is entirely sensible and reasonable. Whether we will be involved in those discussions is up to the Government. If they are going to bring something back-and I believe that that is the wish of the noble Lord, Lord Greaves-we will have an opportunity in this Chamber to join in the debate.

Lord Newton of Braintree: Before the noble Lord withdraws the amendment, as I presume he will, I will express the hope that the House will go along with this. We got into a mess earlier over the vote because of the separation of these issues, which could have been linked. We now have an opportunity to take up the Minister's offer of discussion. I think that we should, and I hope that neither she nor we will dig in out of purism, and that the Clerks will have their ears open.

Baroness Hayter of Kentish Town: Of course, technically we voted on Amendment 53A. I did not move the other amendments.

Lord Greaves: These are all interventions on my speech, but that is quite all right. I happily give way to the Minister.

Baroness Hanham: I will try to dig us out of this muddle. I am happy to have discussions and to include the Opposition. The discussions might be overshadowed slightly by the way in which we proceed on these amendments. However, it is perfectly proper that we should have them and include everybody.

Lord Greaves: On the basis that we are all happy pals together, at least for the moment, I beg leave to withdraw the amendment and look forward very much to the discussions.
	Amendment 73A withdrawn.
	Amendments 73B and 73C not moved.
	Amendment 74
	 Moved by Lord Palmer of Childs Hill
	74: Clause 167, page 154, line 6, at end insert-
	"( ) If having made a determination of pay compensation, the ombudsman must explain how the level of compensation has been calculated."

Lord Palmer of Childs Hill: My Lords, this amendment also has the fatal "o" word-ombudsman-in it, but noble Lords need not be afeared because it is a very non-contentious issue to which the noble Baroness, Lady Hanham, has kindly replied, and I agree with her answer. I tabled the amendment about the ombudsman because, when reading the Bill, one notes that the Housing Ombudsman will make a determination, but no mention is made of any compensation element. Determination is all very well, but an applicant may want monetary payment or grovelling of some sort and that is not mentioned in the Bill.
	When investigating this in advance of the helpful reply of the noble Baroness, Lady Hanham, I went back to Schedule 2 to the Housing Act 1996, which says, as the Minister implied, that the Housing Ombudsman may,
	"order the member of a scheme against whom the complaint was made to pay compensation to the complainant".
	It is already in law that compensation of a monetary sum can be paid. I will make what is almost a drafting point. The laws of this country are so entwined and confused that it is wrong that one has to keep referring back to previous Bills to understand the Bill that one is looking at. We are not talking only of lawyers who will go back and say: "Ah, that is in the Housing Act 1996". In this Bill one does not see any element of monetary repayment as compensation. I seek acknowledgement that, in whatever paper forms are produced, there will be a cross-reference to the 1996 Act so that people can see that there is a determination. I would be very happy if the Minister would confirm something on those lines. I beg to move.

Lord Beecham: My Lords, I will follow the noble Lord, Lord Palmer, on the question of compensation. Clearly, the ombudsman route provides the possibility of compensation. It is not certain whether that would apply to the alternative route, which we debated at some length earlier. Perhaps the noble Earl could indicate whether under the alternative method of the designated person-a councillor, Member of Parliament or tenant panel-there will be the opportunity for a compensation payment to be made by the designated person. If not, we would have two systems, one of which would afford the possibility of compensation while the other would not. I am sure that the noble Earl much appreciated that word in his shell-like ear. In the event that we will have two competing systems, will the Government ensure that guidance is given to tenants that that is the case-in other words, that under one system they may get compensation while under the other they will not? The matter could be discussed in the forum to which the Minister referred. Strange circumstances could arise if the situation were not clear.

Earl Attlee: My Lords, Amendment 74 highlights the Housing Ombudsman's power to order a member landlord to pay compensation to a complainant. I understand that my noble friend would like there to be greater clarity on how the ombudsman calculates the level of compensation to be awarded and I am grateful to him for raising the issue. Our view is that it is not necessary to include any new specific requirements in the Bill. In practice the ombudsman already provides a breakdown of any compensation he has decided to award, which is done in the context of what the ombudsman considers to be fair and reasonable in all the circumstances of the case. This arrangement allows flexibility to address specific issues and to provide a useful level of information, depending on the circumstances of each case. Clearly it would be difficult to attain this flexibility in a legislative duty on the ombudsman.
	The ombudsman is intending to consult early next year on a revised statutory scheme to reflect the proposed extension of his jurisdiction to include complaints about local authority landlords, in addition to housing associations. I have no doubt that there will be further opportunities through that consultation process to engage on these and other issues. In answer to the question asked by the noble Lord, Lord Beecham, anything referred to the ombudsman means that compensation can be paid.

Lord Beecham: My question is in relation to the other routes that have been included in the Bill and which may be taken further in discussions before Third Reading. Would compensation be payable when the matter is dealt with by a local councillor, Member of Parliament or a tenants panel? If not, would that be made clear to the applicant, whereas the ombudsman would provide the possibility of compensation?

Earl Attlee: My Lords, in view of the complexity, a detailed letter would be appropriate.

Lord Palmer of Childs Hill: My Lords, I thank the noble Earl for his reply and the noble Lord, Lord Beecham, for his comments. I am quite confident that the monetary compensation would apply to all reports to the ombudsman, in answer to the comments of the noble Lord, Lord Beecham, so I have no worries on that score. My only comment is that for the sake of clarity in the ongoing negotiations and discussions, it would be useful for non-QCs to see that there is monetary compensation without having to go back to the 1996 Act. I very much thank the Minister for his reply and the reply from the noble Baroness, Lady Hanham. I beg leave to withdraw the amendment.
	Amendment 74 withdrawn.
	Amendment 75
	 Moved by Lord Best
	75: Clause 167, page 154, line 30, leave out from beginning to end of line 7 on page 155

Lord Best: This amendment is about the new powers for the ombudsman to apply to a court to make its rulings legally enforceable-in other words, to insist, having made a judgment through the courts, that the landlord complies with the ombudsman's decision. This is quite a big jump from the current scheme, which is based on informality. At the moment it is an inexpensive scheme. It is very accessible to complainants and people do not come with their lawyers. It is not part of the legal processes. It is feared that the new scheme will rather change the nature of the way in which the ombudsman works. It also carries the same risk that I have been harping on about today, that housing associations will slide into the public sector and become indistinguishable from public sector agencies, which has the effect thereafter that all of their borrowing will become part of the public sector debt, which I know the Government are very anxious to avoid. There is a risk that if housing associations are subject to legally enforceable decisions based on the opinion of a public authority-the ombudsman-they may not be regarded as being outside the public sector. That would be a calamity.
	Once again, this is about trying to retain the independence and non-statutory nature of the sector. The removal of these new legal powers would be helpful in sustaining that independence and the success of the ombudsman's scheme to date, without making the ombudsman's rulings legally enforceable.

Lord Kennedy of Southwark: My Lords, I shall speak briefly to Amendments 75 and 76. They would ensure that the ombudsman's service is not damaged by unintended consequences. What is wonderful about the ombudsman's service is that compared with the courts, proceedings are informal, inexpensive and accessible. It is respected as its rulings are complied with by registered providers. The Government are proposing to solve a problem that noble Lords on this side of the House do not believe exists. We should be careful not to undermine the service. Will the Minister tell the House where the proposal has come from? Who has asked for it? How has it arrived here?

Earl Attlee: My Lords, the proposals relate to the proposed order-making power for the Secretary of State to enable the housing ombudsman to apply to a court or tribunal to enforce his determinations. One of our aims through our package of reforms to social housing regulation is to give a greater role to social housing tenants in the scrutiny of landlord performance. The Bill supports that by providing a clear role for tenant panels in the complaints process. In parallel, we are currently consulting on draft directions to the social housing regulator that will result in tenants having stronger tools with which to scrutinise landlords' performance. The regulator's consumer regulation role will be focused on setting clear standards and responding to failures that cause actual or potential serious detriment to tenants. Alongside these reforms we want to ensure that we continue to promise tenants an effective right of redress. The proposed power to enable the housing ombudsman to enforce his decisions through the courts-although I hope it is never needed-gives tenants confidence that effective redress will continue to be available.
	The noble Lords, Lord Best and Lord Kennedy, give an accurate description of the current situation. There is not a problem. The Government would use this power only if levels of compliance with the housing ombudsman determinations declined significantly. At present compliance is high, as noble Lords have recognised. Only one recommendation has been rejected in the past seven years. We hope and expect that this will continue. If so, we have no intention of using this power.

Lord Kennedy of Southwark: Am I right that the noble Lord is saying that the Government are taking a power that they believe they do not need?

Earl Attlee: My Lords, it is wise to make sure that we have the order-making power should we need it. It concentrates the mind. As I said, we have no intention of using it unless the situation deteriorates. I suspect that it will not, but it is always advisable to have something in your back pocket.

Lord Kennedy of Southwark: That is a very interesting response. I have heard the exact opposite from the government Bench on many other proposals.

Lord Beecham: I remind the Minister of the thrust of the question of the noble Lord, Lord Best-the risk that because an order is enforceable, the RSL sector is regarded as being within the public sector, with consequential adverse effects on the financial status of its expenditure in relation to the Government's expenditure requirement.

Earl Attlee: My Lords, I am confident that my department has properly considered those matters. It is obviously a very important issue and I have already undertaken to write to the noble Lord, Lord Best. Other noble Lords will of course get a copy, and there will be a copy in the Library.

Lord Best: In the light of these comments I am delighted to withdraw the amendment.
	Amendment 75 withdrawn.
	Amendment 76 not moved.
	Amendment 77
	 Moved by Baroness Doocey
	77: After Clause 170, insert the following new Clause-
	"Statutory overcrowding: reform of overcrowding standard
	(1) Part X of the Housing Act 1985 is amended as follows.
	(2) For sections 324 to 332 substitute-
	"324 Statutory overcrowding
	A dwelling is overcrowded for the purposes of this Part when the number of persons sleeping in the dwelling is such as to contravene the standard specified in section 325 (the overcrowding standard).
	325 Overcrowding standard
	(1) The overcrowding standard is contravened when the number of rooms in a dwelling which are available as sleeping accommodation is smaller than the number specified in subsection (3), having regard to the number and description of persons who are ordinarily resident in the dwelling.
	(2) For the purpose of calculating the number of rooms available as sleeping accommodation, no account shall be taken of a room which is of a type normally used in the locality as a living room or of a kitchen.
	(3) The permitted numbers are specified in the table below.
	
		
			 Description of persons  Number of rooms 
			 Two persons who are spouses or civil partners of each other (or who live together as husband and wife or as if civil partners)  1 
			 Each other person over the age of 21  1 
			 Any pair of children both aged under 10  1 
			 Any pair of children or young persons of the same sex both aged under 21  1 
			 Any child or young person under the age of 21 not included in any of the above categories.  1 
		
	
	(4) In applying the standard specified in subsection (3)-
	(a) no account shall be taken of a room having a floor area of less than 50 square feet;
	(b) a room measuring 50 square feet or more but less than 70 square feet shall not be taken to be available for anyone other than one child under 10;
	(c) a room measuring more than 70 square feet but less than 90 square feet shall not be taken to be available for anyone other than one person of any age or two children under 10;
	(d) a room measuring more than 90 square feet but less than 110 square feet shall not be taken to be available for anyone other than one person of any age or two persons of whom at least one must be a child under 10; and
	(e) a room measuring 110 square feet shall be taken to be available for two persons of any age.
	(5) The Secretary of State may by regulations prescribe the manner in which the floor area of a room is to be ascertained for the purposes of this section; and the regulations may provide for the exclusion from computation of floor space in a part of the room which is less than a specified height not exceeding eight feet.
	326 Notice to abate overcrowding
	(1) Where a dwelling is found to contravene the overcrowding standard, the local housing authority may serve on the owner or manager of the dwelling notice in writing requiring him to take reasonable steps to abate the overcrowding within 28 days from the date of service of the notice.
	(2) For the purposes of subsection (1), a person shall be considered to have taken reasonable steps to abate the overcrowding if he takes such steps as are necessary in law to recover possession of the dwelling or to reduce the number of persons in occupation of the dwelling or if he does any other act which in the opinion of the authority amounts to a reasonable response to the abatement notice.
	(3) If, within the period of 28 days following service of an abatement notice under subsection (1), or within such further period as the local housing authority shall in its discretion allow, the owner or manager has not taken reasonable steps to abate the overcrowding, the authority may apply for an order to the county court.
	(4) On an application by the local housing authority under subsection (3), the court may order that vacant possession of the dwelling or part of the dwelling be given to the landlord within such period as the court may determine.
	(5) An order under subsection (4) may be stayed or suspended for such period and on such conditions as the court shall decide.
	(6) In exercising its powers under subsection (4), the court shall have regard to the interests of any tenant or occupier of the premises, and in particular to the security of tenure of any protected or statutory tenant under the Rent Act 1977 or any assured tenant under the Housing Act 1988.
	(7) Expenses incurred by the local housing authority under this section in securing possession of a dwelling may be recovered from the landlord or manager by action.
	(8) Service of an abatement notice under subsection (1) shall not prevent the authority from serving a prohibition order under section 20 of the Housing Act 2004."
	(3) Omit sections 335 to 344."

Baroness Doocey: My Lords, I declare an interest as a member of the London Assembly and the Metropolitan Police Authority.
	This amendment seeks to deal with the nature and extent of overcrowding and to highlight why the present law is inadequate and needs reform. Overcrowding is an invisible problem compared with homelessness and rough sleeping. Consequently, it tends to be viewed as less of a priority. But overcrowding has a serious impact on children, especially their health and educational attainment, and it disproportionately affects larger households.
	Overcrowding is a major problem in London. In 2008 London had more than 200,000 overcrowded households, almost 7 per cent of London's homes. That was an increase of one-third over the previous decade. About half of these overcrowded households are in the social rented sector; overcrowding is worse in that sector than in any other form of tenure. London has over 40 per cent of England's overcrowded households in the social rented sector, and nearly 400,000 London children live in overcrowded conditions. The overcrowding rate for black and minority ethnic households in London is about four times that for white British households.
	There is no doubt that overcrowding is largely a consequence of housing supply shortage. Therefore this amendment is not a complete solution to overcrowding. For that, we need to build many more homes and, in particular, larger family homes. But this amendment is intended to deal with the abuse of the existing housing stock.
	Breaching legal overcrowding standards is a criminal offence, but the official definition of overcrowding has survived unchanged since 1935 and is seriously outdated. Relatively few households are legally overcrowded even though some people have to sleep in living rooms and kitchens. There is little incentive for local authorities to tackle the problem if the law is not actually being broken. This amendment meets the need to provide an updated definition of statutory overcrowding based on the bedroom standard. This would realign the law with the actual problem and would therefore provide local authorities with an incentive to reduce overcrowding. Once there is a serious legal incentive in place for local authorities to tackle overcrowding, it may force them to reorder their priorities when it comes to housing allocation policies.
	Overcrowding is a very serious issue. So if the Government are not minded to accept this amendment, perhaps my noble friend the Minister could outline what the Government propose to do to update the official definition of overcrowding, which has not changed for the last 75 years.

Lord Beecham: My Lords, even in your Lordships' House there are not many of us who were around when these standards were laid down in 1935, as the noble Baroness has pointed out. Housing conditions in general have improved since those days, but she is quite right to draw attention to serious issues around overcrowding. They are not confined to London, although her figures show these issues are extremely problematic in the capital. She is also right to draw attention to the particular problems faced by some BME communities, many of whom have large families and find it difficult to secure accommodation which is adequate to house them.
	I have every sympathy with the amendment. I note that the measurements are given in "old money", when perhaps these days we should be looking at metric equivalents, but that is a trivial point. I am however somewhat at a loss as to how to respond to the Government's response to the amendment. It seems to be based, to put it crudely, upon facile optimism about the effects of the measures that are being taken around the duties to deal with homelessness and, in particular, the use of flexible tenancies as a means by which, apparently by magic, accommodation of the appropriate size in the appropriate location will become available. The Minister for Housing assured us at a meeting a couple of days ago that he does not expect flexible tenancies to go much less than 10 years in duration, as opposed to the two years that was thought to be the benchmark. In his view-I hope he is correct-that will in fact constitute only a handful of cases. Given that, I cannot see how this measure is going to free up significant accommodation in general, let alone for this particular category.
	It seems to us in the Opposition that the noble Baroness has touched on a key issue and the Government's response thus far has not addressed it to any significant extent. Identifying the issue and improving the standards by which the question of overcrowding is to be judged does not in itself transform the situation, of course, but it would certainly allow housing authorities and the Government to have a better view of the reality of the situation.
	I hope that the noble Baroness will not mind me quoting the example she gave in a conversation with me, of a recent case of a child sleeping in a bath which was deemed by the housing department to be acceptable because the child was in "a room". It is extraordinary for this situation to be acceptable to a housing department in 2011. It could hardly have been acceptable in 1935. But statutorily it is acceptable, and she has other examples of that kind. This is extremely worrying and I am sure the Government would be horrified if there were found to be a significant number of such cases.
	Strengthening the framework will allow a proper measurement to be taken of the degree to which this is an issue that needs to be addressed, and with a greater urgency than is likely to occur simply as a result of the other changes that the Government have made. I hope that the Minister will talk further with the noble Baroness to see how this can be improved and, beyond that, agree that this is an issue that should be pursued outside the context of this Bill as the Government look into housing policy generally.

Baroness Gardner of Parkes: My Lords, I am sympathetic to the idea of the need for action on this. I was very distressed this week to meet someone in a studio flat, or self-contained bedsit, who told me it is impossible for her to sleep. The private accommodation units where she resides are listed as being for one person, but immediately above her, accommodation of the same size is shared by five people. She finds it impossible to sleep, or even live there. She is trying to find somewhere to move to in any case, as her small accommodation is going up from £600 per month to £800 per month, but she works as a cleaner and is experiencing great difficulty.
	What worries me is that this is an illegal overcrowding, from what the noble Baroness has said, and yet the tenants are frightened to do anything about it for fear of being put out. I asked her why she did not report it and she said she did not dare because she would be put out and would have nowhere, and until she could find somewhere to go to she could do nothing. This is what worries me about this amendment. It is marvellous to make all these proposals but where is the accommodation going to come from to house all these people?
	I come from a very big family and we were fortunate enough to have a house, and space is not so limited in Australia, but if you have a big family would you not rather be somewhere safe and secure, even overcrowded, than nowhere at all? I am very concerned about the impact of being too precise about things. As I say, in theory it is absolutely marvellous but I would really like to know how it is going to work in practice.

Lord Taylor of Holbeach: My Lords, I thank my noble friend Lady Doocey for bringing these amendments and indeed the noble Lord, Lord Beecham, and my noble friend Lady Gardner of Parkes for their contributions to this debate. It is an important issue and the Government view overcrowding as a matter of serious concern. My noble friend Lady Doocey mentions the impact it has on the lives of people, children in particular, and we have heard the evidence of my noble friend Lady Gardner.
	Overcrowding adds to the stress of people, it damages health, it costs the community happiness and well-being, and interferes with children's upbringing and education. Despite the previous Government investing, quite rightly, thousands of pounds of taxpayers' money in helping councils tackle overcrowding, the number of families in overcrowded housing remains unacceptably high. My noble friends have provided a very detailed revised standard in their amendment but I have to tell them that the Government do not believe that changing the statutory overcrowding standard is the answer to overcrowding. It would increase, by definition, the number of families deemed to be statutorily overcrowded but it would not make it any easier for councils to help them, as my noble friend Lady Gardner of Parkes said. We need to provide the right tools so that we can put in place strategies that reduce overcrowding.
	I have to assure my noble friend Lord Beecham that the Government are convinced that the reforms we are making to social housing through this Bill will assist this process. Perhaps I can elaborate on them. By taking existing tenants who are not in need out of the allocation rules, councils will be able to help under-occupiers to find a more suitable property, freeing up more family-sized housing for overcrowded households. I am sure that is something that we would all wish to see. By strengthening mutual exchange through the introduction of a national home-swap scheme, it will be easier for under-occupying and overcrowded households to help each other. By enabling councils to make greater use of the private sector to support homeless households, they will have more scope to use social housing to help others in housing need, and by retaining the reasonable preference provisions in allocation legislation, we will ensure that overcrowded families continue to get priority for social housing.
	Over the longer term, new flexible tenancies will help councils provide housing that meets households' needs at the time they need it, but also just for as long as they need it. I am sure that this is the right way forward. We will be looking at the new statutory allocation guidance for local authorities and this will provide an opportunity to encourage all councils to adopt a more modern standard for assessing overcrowding when prioritising social housing. The Government believe that this would be a better way to ensure that families who live in cramped conditions get proper priority for appropriate social housing, rather than changing the statutory standard definition, because it would address the issue of social housing directly. That is the right way to reduce overcrowding and that is why I hope that my noble friends will withdraw their amendment.

Baroness Doocey: My Lords, I am quite disappointed with the Minister's response. I find it astonishing that the Minister is arguing that a law that was put in place 75 years ago that allows people to sleep in kitchens and living rooms and still not legally be classed as overcrowded does not need reform. I find that very, very difficult to understand. I take note of the various things he has said about how the new system will work. I am perhaps not as convinced as he is that it will free up all of the accommodation, and one reason is that until councils have a legal duty to do something about families in overcrowded conditions, I cannot see that they are going to treat this as a priority. Would the Minister be willing to meet me to discuss this in a bit more detail? If that were the case I would be happy to withdraw the amendment at this stage.

Lord Taylor of Holbeach: Yes, I think we have made it quite clear that in our view this Bill is not the place to be putting this particular amendment. I have given an indication that new advice and guidelines are perhaps forthcoming. If my noble friend would find it useful to talk to officials about this matter before those guidelines are issued, I hope that she would be happy to participate in that discussion.

Baroness Doocey: Thank you. On that basis I withdraw the amendment.
	Amendment 77 withdrawn.
	Clause 171 : Tenancy deposit schemes
	Amendment 78
	 Moved by Earl Attlee
	78: Clause 171, page 159, line 27, leave out from "words" to "and" in line 31 and insert "for "if on such an application" substitute "in the case of an application under subsection (1) if the tenancy has not ended and","

Earl Attlee: My Lords, I beg to move Amendment 78 and speak to Amendments 79, 80 and 243. These amendments are four minor and technical amendments to the new clause that we introduced in Committee. These combine to remove a lacuna in the clause as currently drafted. They would mean that Section 214(3A), which enables the court to order that the deposit be repaid in part or in full to the tenant, would apply if the tenancy had ended at the date of the application to the court but not if it had ended after that date. Clearly this is not the intention of the legislation and I ask noble Lords to support this amendment. I beg to move.

Lord Kennedy of Southwark: My Lords, the Opposition accept that these are minor technical amendments and are happy to support them on that basis.
	Amendment 78 agreed.
	Amendments 79 and 80
	 Moved by Earl Attlee
	79: Clause 171, page 159, line 34, at end insert-
	"(6A) After subsection (2) insert-
	"(2A) Subsections (3A) and (4) apply in the case of an application under subsection (1) if the tenancy has ended (whether before or after the making of the application) and the court-
	(a) is satisfied that section 213(3) or (6) has not been complied with in relation to the deposit, or
	(b) is not satisfied that the deposit is being held in accordance with an authorised scheme,
	as the case may be.""
	80: Clause 171, page 159, line 36, leave out from beginning to third "the" in line 37
	Amendments 79 and 80 agreed.
	Amendment 81
	 Moved by Lord Best
	81: After Clause 172, insert the following new Clause-
	"Exclusion of certain rural dwellings from the preserved right to buy
	The preserved right to buy under section 171A of the Housing Act 1985 (cases in which right to buy is preserved) shall not be available in respect of a dwelling-house let by a registered provider of social housing in a rural area designated for the purposes of section 17(1)(b) of the Housing Act 1996 (right of tenant to acquire dwelling: supplementary provisions)."

Lord Best: My Lords, Amendment 81 is about the exclusion of some rural dwellings from the preserved right to buy. Quite a few tenants who were previously in the public sector have become tenants of a housing association, through large-scale voluntary transfers. Those tenants, and indeed others in social housing, have the preserved right to buy: the opportunity, if they move around, to buy the place to which they move if it is another social housing home. However, if they wish to move into a home that falls under a Section 106 planning agreement, which provides that the property must be retained in perpetuity as a rented social housing home-that is; it is a condition of planning that a certain number of homes are for renting-they will be unable to do so because the landlord would be in breach of the Section 106 agreement. The preserved right to buy is rather paradoxically preventing people moving out of the council house that they are in at the time and into a new property that has been built under a Section 106 agreement.
	This amendment excludes certain rural dwellings from the preserved right to buy, allowing the people to move in and not then be able to exercise the right to buy that property because of the Section 106 agreement and the restrictions on that property. This amendment would be helpful to people moving around-to tenants. It is unfair at the moment that they have to be turned away, even though the case is good, because the properties are restricted and cannot be sold into home ownership on a permanent basis.
	During the summer, I received a lot of helpful correspondence from Ministers and the civil servants have been very helpful. On this matter, I had a reply which I think indicated that the point had not been fully understood by the civil servants. They have been marvellous in every other respect, but with this one aberration I did not get a satisfactory response. I am not entirely sure that the point was fully understood, which must have been my fault when making it in the first place. If this small, unintended consequence of legislation could be cleared up in the Bill, it would be helpful to the mobility of people in rural areas and in places where there are restrictions in the properties that have been built, thus helping mobility. I beg to move.

Earl Attlee: My Lords-

Lord Kennedy of Southwark: The noble Earl was a bit too quick for me. The Opposition gives its full support to the noble Lord, Lord Best, in moving his amendment on the exclusion of certain rural dwellings from the preserved right to buy. He is seeking to deal with an unintended consequence of the planning system. Many social homes in rural areas are built through Section 106 agreements. An issue can arise where housing is transferred from the local authority to housing associations. In these cases, existing tenants are given a preserved right to buy. When Section 106 agreements are used to build new social homes in rural areas, there is often a planning obligation which means that they must remain for social let. In those cases, tenants with a preserved right to buy are unable to move into these properties.
	The amendment fixes an unintended consequence and the tenants would then have the right to acquire, which does not apply in rural areas. Therefore, the problem would not happen and the tenants in those situations can seek to move to social housing in rural areas if they wish. I hope that the noble Earl, Lord Attlee, can see that we are trying to be constructive and sort out a problem for everyone's benefit.

Earl Attlee: My Lords, the noble Lord, Lord Best, in moving his amendment suggested that his point was not fully understood. He alarmed me somewhat because he talked about Section 106 and its consequences. Unfortunately, my notes do not refer to Section 106 and nor do the Q and As. If my response does not fully answer his question, I will of course write to him with further details.
	Tenants who have been involved in a stock transfer from a local authority to a registered provider would have agreed to this transfer on the basis that they would retain their right to buy. We do not think that it would be proper to remove this right from the tenant. Equally, we do not think that it is right that secure tenants who are part of a future stock transfer should have their longstanding right to buy taken away simply because they live in rural areas and their homes have been transferred to a new landlord.
	However, while we wish to ensure that transferred tenants are not denied their existing rights, there is statutory provision to ensure that the new tenants of these properties do not get the right to purchase their homes in order that the properties remain available to those in need of social housing. There are existing measures in place to ensure that homes in rural areas, which are sold under the preserved right to buy, remain available to people at affordable prices.
	Landlords can already impose restrictions requiring owners who wish to sell to either resell only to people who have lived or worked locally for at least three years, or first offer their home to the landlord, giving them the opportunity to return the property to their existing housing stock if they wish to do so. These restrictions on reselling are already in place in a very significant proportion of our countryside and remain in place in perpetuity. In our view, this is sufficient.
	I hope that I have met the noble Lord's points. If I have not, I will urgently have a meeting with him and officials in order to further examine the issues.

Lord Best: I am very grateful to the noble Earl for that. A meeting will be necessary and I am grateful to him for agreeing to that. I beg leave to withdraw the amendment.
	Amendment 81 withdrawn.
	Consideration of Report adjourned until not before 8.26 pm.

Statement of Changes in Immigration Rules

Copy of the Rules
	Copy of the Report

Motion of Regret

Moved by Lord Hunt of Kings Heath
	To move that this House regrets that it is not clear from the Impact Assessment or Explanatory Memorandum of the Statement of Changes in Immigration Rules (HC 1148) how the findings from the consultation have fed into the development of the policy or the estimates of the costs and benefits of the changes.
	Relevant document: 35th Report from the Merits Committee.

Lord Hunt of Kings Heath: My Lords, this statement of changes in Immigration Rules makes a number of changes to those rules and sets out the second set of changes to the rules governing the student immigration system in tier 4 of the points-based system. The tier 4 changes include restricting permission to work during studies for students applying for entry clearance or leave to remain and a restriction in the entitlement to bring dependents, partners and children into the UK.
	The statement has been brought to the special attention of the House by the Merits Select Committee in relation to the tier 4 rules. I wish to express my great thanks to that committee for its work in relation to this statement. The House may recall that the Government earlier published a statement of intent, setting out the full planned changes for the student immigration system. However, that statement was laid without the impact assessment for the changes and the committee identified significant gaps in the analysis of the consultation responses. The Government have now laid the impact assessment for the reform of tier 4 of the points-based system.
	The impact assessment says that the Government intend to reduce abuse through the immigration system and to reduce net immigration significantly. The impact assessment sets out the policy objectives as being to,
	"Reduce the areas of the student route that are prone to abuse ... Reduce net migration overall by the end of the current Parliament ... Improve selectivity of students to the UK, to ensure they are the brightest and the best ... Restore public confidence in the immigration system ... and ... Ensure that the system is robust and practical to enforce".
	The Opposition have consistently set out their concerns about the impact of this policy. The UK has a worldwide reputation for providing quality education to overseas students. My understanding is that we are the second most popular student destination in the world after the US. Overall, the international student market is estimated to be worth £40 billion to the UK economy. There is very real concern about the impact of the Government's actions on this very important economic sector and the reputation of the UK generally. I hardly think that the current state of the economy lends itself to being the Government being so cavalier with such an important part of it.
	Apart from the matter of principle and the potential damage to the UK economy of the Government's approach, there is considerable uncertainty about the likely impact. In March 2011, the estimated impact on student numbers suggested a reduction in student visas of between 70,000 and 80,000, and yet the impact assessment suggests a reduction of 232,000 over five years from 2011 to 2015 against a total estimated baseline of 558,000. Quite understandably, I suggest, the impact assessment states:
	"There is a great deal of uncertainty around the expected path of student visa demand".
	The analysis of the risk identifies that estimation of the impact,
	"is not straightforward, and is subject to error".
	Not surprisingly, the Merits Select Committee says that,
	"given the objective of reducing net migration, the Committee would have expected to see a greater analysis in the IA of the numbers of students who leave the UK at the end of their studies and those who remain".
	This is a very important consideration when looking at the overall impact of the Government's policy. I would be grateful if the noble Earl would respond to that.
	On the costs and benefits, which is another important factor, the committee points out that the impact assessment,
	"estimates the total costs for the changes to student immigration system as being £3,558 million, with the total benefits being £1,119 million ... At over £2.4 billion, the estimated overall cost of the package of changes is significant, and the Committee reiterates that it is unacceptable that the IA was not made available when the first tranche of changes were laid before Parliament".
	I hope that the noble Earl will be able to acknowledge that and give some reassurance that this will not happen again, given my own expectation that the Government will produce a number of further changes to the Immigration Rules in the future.
	I would also like the noble Earl to respond to the point about the cost to the UK Border Agency itself, which I understand is included in the figures I have just quoted. The committee states:
	"In terms of direct costs and benefits, the IA estimates that over the four year appraisal period UKBA will receive around £160 million less in fee income ... This is a significant reduction in fee income at a time of budget cuts for UKBA. Although the IA also says that there will be a saving of around £150 million in processing costs, it is not clear whether this is actually a cashable benefit ... The IA also estimates that over the four year period, tuition fee income will fall by approximately £170 million ... However, this is based on the assumption that for every ten non-EU migrants no longer able to study at all affected institutions, eight of their places would be filled by either EU of British nationals".
	In the current circumstances, I would have thought that that is a very significant assumption. No wonder the impact assessment acknowledges that the estimate is "relatively uncertain".
	I have no doubt that the noble Earl will wish to respond to these concerns about the reliability of the figures. We would also ask him to respond to the point raised by the committee that,
	"it is not clear from the IA how the findings from the consultation have fed into these estimations".
	This is not the first time that we have had to debate the Government's reluctance to spell out the consultation and the way it has influenced the Government's decisions. The committee gives an example of this when it states that,
	"the estimation of costs to educational establishments would benefit from input from such bodies. This is regrettable as the Government presumably received some useful information given that the consultation specifically asked about the main advantages/disadvantages of the changes, including any financial impacts".
	A cynic might say that the Government did not like the result of the consultation, and that is why they have not been very open about it. I am not cynical, but I would like the noble Earl to respond to that point.
	Of course, overriding the questions raised by the Merits Select Committee is a deep concern shared by many noble Lords about the general policy. This country has enjoyed a fantastic reputation for the quality of its education. Thousands upon thousands of young people in particular, but not just young people, have come to our shores. Most have gone back home, but they have retained links with this country and their educational establishments. The reputation of this country has been strongly enhanced, together with a huge amount of inward investment. I still fail to understand why the Government do not recognise the potential damage they are doing to these establishments and to the economic benefit of this country. The fact is that when it comes to bogus students and bogus colleges, the previous Government had already taken decisive action in that regard. The suspicion remains that the Home Office, desperate to meet the quota it set, charged ahead on this because it thought it would be easy to do, coupled with the weakness of the business department to defend effectively the interests of educational institutions. That is why we have this policy which, in my view, is a disastrous one.
	I end by quoting Jonathan Portes, director of the National Institute for Economic and Social Research:
	"The government has said that economic growth is its top priority and the economy needs to rebalance away from consumption and towards exports".
	But as Mr Portes said, the Government have here produced,
	"a policy that will have a significant negative effect on growth and reduce exports".
	Why on earth have the Government gone down that route?
	So here we are, with the outcome of a flawed policy, poorly executed, with inadequate information for Parliament which will do considerable damage to our economy and our educational institutions. I would remind the noble Earl of the publication yesterday of the top 100 universities. A remarkable number of UK universities are in the top 10 and in the top 100-including, I am glad to say, my own Birmingham University. Why are the Government putting that at risk? We demand those answers, and I hope that the noble Earl will be able to respond today.

Baroness Hamwee: My Lords, I welcome this debate and I am glad that the noble Lord was able to table his Motion. I should say that I am a member of the Merits Committee. It seems to me that the sort of points that have been made in this report are just the sort of thing that the committee is there for. I welcome the debate, although I do not welcome the fact that it is necessary. With regard to the issue of the production of the impact assessment-I will come on to the substantive issue because I cannot resist it-it is not the first time that I will have talked about the importance of scrutiny. It is important both to those who are the proponents of a proposition and to the opponents. The first bunch wants to get it right and the second bunch wants to pick holes in it; there is a unity of purpose there. Making the point, as the Merits Committee has done and as the House is now asked to do, is worth while only if the culture changes and this sort of error or omission-call it what you like-is not repeated. This is the sort of point that the Merits Committee has often had to make by way of a warning shot. The sanction from the committee is to bring the matter to the House.
	I recall reading the agenda item and, in order not to make the Hansard writers blush, I will not use the language that I used then when I saw the figures, which are startling. The noble Lord referred to many of them: the 232,000 estimated reduction against the 70,000 to 80,000 estimate given only six or seven months ago, and a net cost of more than £2.4 billion with the UK Border Agency estimated to receive about £160 million less in fee income on the basis of the option chosen against the "do nothing" option.
	That takes me to my next point. The committee does not make this point but I will. The options given are not a range but simply the polarised options of "do nothing" or "do this one other thing which we, the Government, are proposing". So there is a steer to what one might describe as the right answer. So although this was a consultation, it is more akin to some sort of choice. It is not easy or indeed even possible for Parliament to assess what it is being asked to agree in this way. The Merits Committee report was very measured, and I quote from Paragraph 10:
	"The Committee recognises the difficulty in developing the estimations of the likely costs and benefits of the changes, particularly given some of the gaps in the data and the potentially complex range of impacts. However, it is not clear from the IA how the findings from the consultation have fed into these estimations".
	That is a pity because the questions asked in the consultation were interesting. Most of them asked for a "yes", "no", or "don't know" answer but one of them asked:
	"In the light of the proposals described in this document, what do you think will be the main advantages/disadvantages, including any financial impacts, to you, your business or your sector?"
	That is just the sort of thing that should be made publicly available. That is the purpose of the consultation. The background questions which consultees were asked would also have been useful in informing the debate. They were asked:
	"How many students (approximately) started new courses at your institution in the 2009/2010 academic year?"
	and,
	"What is your estimate of overseas students (non-EEA) as a proportion of your total student population?"
	As I say, that is just the sort of thing that we should be able to see to put the changes into context.
	In the end, of course, what matters is the policy. Many noble Lords across a number of debates, including many of my noble friends, have made very clear our real concerns with some of the policy objectives. Even if we support a reduction in net migration, we do not believe in clamping down on student visas. We do not believe that is in the long-term reputational interests of the UK, nor its social, political and wider economic interests. I am not convinced it is even coherent within its own terms. I have commented before on the term "the brightest and the best". That begs an awful lot of questions. We cannot assess the success-a term I use deliberately-without knowing how many students leave at the end of their course, which we-I do not just mean Parliament-are not adequately equipped to do. There is an increase of one when an individual arrives in the country and when he leaves there is a decrease of one.
	The Immigration Law Practitioners' Association, which is immensely helpful to your Lordships in the detailed, analytical and very sensible briefings it provides, has drawn more concerns to our attention. It makes the point:
	"The effects of lack of proper evidence, for the consultation or for the impact assessment, go beyond an unsound evidence base. They go to the question of fair and equal treatment of persons on the basis of their nationality".
	It draws your Lordships' attention to students from designated so-called "low-risk" nationalities where the UK Border Agency bases decisions on national origins. The countries I call "respectable" in this context are Canada, Australia, Hong Kong and New Zealand. So an immigration history of an individual may be lengthy and exemplary but the way in which that individual is treated by the UK Border Agency does not depend on this but on his national origins. The ILPA cites examples of the UK Border Agency "not being over-zealous" in attempting to verify documents, not pursuing responses or assuming a negative response if a phone call is not returned within a couple of days, and refusing to pay a de minimis fee of a couple of quid in order to get copies of necessary documents. It does not make me feel proud of the way we deal with people who want to come into this country and show a confidence in it and a loyalty to it.
	The ILPA also draws your Lordships' attention to the slightly wider problems which arise from the changes we are asked to consider about the rights of adult refugees to be reunited with their children who are minors. I am concerned about what I read on that. Finally, it cites the example of the Academic Technology Approval Scheme. This is almost laughable except that it is really very serious. The scheme requires a certificate to be obtained where studies are said to,
	"relate to the transfer of knowledge or skills that could be used in weapons of mass destruction or their means of delivery".
	If the word "nuclear" comes up in an application, possibly in the context of something like DNA, the assumption is made that the student is coming in to learn bad things, which is nonsense.
	The sector was very vocal in its concerns about the financial impact of the changes and wider arguments than those referred to in the impact assessment were shared with your Lordships. I recall my noble friend Lady Benjamin, who is Chancellor of Exeter University, talking about the value that students bring to the local area, and bluntly, I agree with the noble Lord, Lord Hunt. The sector is such a good earner, such a good revenue generator well beyond its immediate operation, that restricting access as a proposition frankly defeats me.

Lord Avebury: My Lords, I join my noble friend in welcoming the Motion that has been tabled by the noble Lord, Lord, Hunt, and I find myself in substantial and almost entire agreement with every single word that he spoke in support of it. I congratulate my noble friend Lady Hamwee on the sterling work that she does on the Merits Committee which has resulted in bringing this matter before the House, and not for the first time. I remind your Lordships that this is the second occasion in a row when the Merits Committee has commented on a statement of changes in the Immigration Rules. That indicates to me that all is not well in the direction of the UKBA. I often thought that the separate management of the UKBA was a mistake. At a time when the Government are looking for economies, they could perhaps do worse than to consider bringing it back under the umbrella of the Home Office.
	The Motion of the noble Lord, Lord Hunt, uses the wording of the Merits Committee report and is none the worse for that. It regrets that it is not clear from the IA or the Explanatory Memorandum how the findings from the consultation have fed into the development of the policy or the estimate of the costs and benefits of the changes. As far as I can see, that is not an opinion, but a fact.
	In the most glaring case of a discrepancy between the responses to the consultation questionnaire and the statement, 85 per cent of the respondents disagreed with the proposal further to restrict students' paid work when there is no evidence that it has impaired their academic performance and when fee increases have made it much harder for students to pay their way. There are many other instances where significant minority responses have been overridden. The noble Lord, Lord Hunt, talked about the considerable uncertainties affecting student numbers and the costs and benefits laid out in the impact assessment, which I shall come to discuss in a few minutes.
	As one would expect, more than three-quarters of English language school respondents disagreed with the proposal to require all tier 4 students to demonstrate level B2 English proficiency, a requirement which will be a major problem for many schools and private colleges of further education. The IA states that unless English language schools can attract either EU students or student visitor route applicants, they face going out of business. The replacement estimate of 80 per cent, to which the noble Lord, Lord Hunt, referred, is not only difficult to believe but pure guesswork. Schools say that a £1 billion industry is being put in jeopardy.
	The Government have recognised the particular difficulties of the English language sector, however, by creating the extended student visa route, allowing applicants to come here for 11 months, which is non-renewable. They are not allowed to work or bring in dependants, or to switch into other routes including tier 4. When this was announced in December 2010, the Minister said that he would monitor it closely to ensure that it did not become a loophole and take a decision on whether to make it permanent in due course. I understand that it is working well so far. I should like the Minister to tell us when a decision will be taken on incorporating this route into the rules.
	In the past, some English language and FE colleges have been used as a way of gaining entry to the UK with the intention of working illegally. It would be useful to know whether the Minister has details of the attendance records of those admitted under the extended student visa route since it came into force on January 10, and if not, how else he is monitoring the new route. I hope that the bogus colleges have been eliminated since it was provided that overseas students could apply only to those schools which are accredited and the list of schools was reduced by some 90 per cent to 1,500, all of which are registered with the UKBA. But there may still be a residual problem with individuals who apply to a genuine college simply to gain entry. If so, what obligations do the colleges have to report unexplained absences to the UKBA, and are any statistics available on those absences as an indication of the use of education as a continuing route to illegal entry? I ask this question believing that the loophole has been finally closed, but it would be useful to have that reassurance from the Minister.
	An additional problem has been created for the English language sector in that the Government suddenly decided at the end of July, without any consultation, that it was going to be subject to a new inspection regime in substitution for the one that has been operated-as far as I am concerned, perfectly satisfactorily -by the British Council for many years. This will be a monopoly handed to the Independent Schools Inspectorate, which has no experience or knowledge of the sector and intends to charge four times as much as the British Council has in the past. Since the BC/Accreditation UK inspection scheme is fit for purpose, which I ask the Minister to acknowledge, the right answer as proposed by the schools is that BIS and DfE should jointly designate the private further education sector as subject to regulation and approve BC/Accreditation UK as an inspection body under the powers of the Education Act 2002. Would my noble friend the Minister be kind enough to comment on that proposal? I shall ask him to address the overall problems of the sector that English UK has drawn to my attention, which are too numerous, complex and potentially disastrous to be covered adequately in this debate.
	The rationale for the statement is clearly set out in the impact assessment: that too many migrants have been allowed to enter the UK and that the Government's aim is to reduce the level of net migration to sustainable levels. As students make up the majority of non-EU immigrants, yet we do not propose putting a limit on their numbers, we have to make it harder for student applicants to enter and harder to sustain themselves by working part-time while they are studying if they are not the brightest and best. Deterring students from coming to Britain will certainly reduce the numbers, but on the Government's own estimate it will do so at a cost of £2.4 billion a year to the economy-as mentioned by the noble Lord, Lord Hunt, and my noble friend Lady Hamwee-and possibly even more in the long term. Of course it is necessary to ensure that every student who enters the UK is studying at a bona fide education institution towards a qualification that will enhance their prospects when they return home, as the IA emphasises, but the statement does nothing directly to eliminate bogus providers, which I presume, as I have said already, have been eliminated by the inspection regimes put in place over recent years. It concentrates entirely on making life harder for all students, the legitimate as well as those who in the past have used the education route as a means of entering the country with the intention of illegal working.
	It has been said by the noble Lord, Lord Hunt, and my noble friend that no impact assessment was published for the previous statement of changes. The one that we are looking at today, although it does not say so, covers both this and the previous statement. Will the Government give an undertaking that Parliament will never again be asked to consider changes to the Immigration Rules unless we are provided with an IA?
	The IA states that we need to filter out those who contribute least and who pose the highest immigration risk. There may be good reasons for the accreditation by Ofsted and its devolved equivalents of all tier 4 sponsors and for making them all highly trusted sponsors, as suggested in the IA, but are these changes in the statement? I do not see them either in the statement or in the Explanatory Memorandum. HTS accreditation costs £14,000, and I am told that all colleges, including those offering only the extended student visitor courses of up to 11 months not covered by tier 4, need to obtain this status in order to be considered favourably by applicants and their agents overseas.
	I do not see, either, the changes in the English Language requirement mentioned on page 11 of the impact assessment, demanding B2 for undergraduates and above, and B1 for lower-level courses. Perhaps the Minister could point out where this is mentioned in the statement. There is enough paperwork to be digested in assessing the statement without the inclusion of text that refers to some other provision.
	The estimates given for the reduction in student numbers and the costs and benefits arising from the changes in this statement and its predecessor, taken together, are subject to huge margins of uncertainty, as the noble Lord, Lord Hunt, pointed out. Increases in the levels of fees are bound to put off many applicants as well and the danger is that the combined effect of these increases and the present changes, together with increased competition from overseas, will seriously damage an industry that, according to an independent study for BIS, produces something like £14 billion of annual exports, potentially increasing to £26 billion in 2025. Reductions in the fee income from overseas students may undermine the high standards that we have always maintained in both higher and further education, driving students into the arms of our competitors and producing negative feedback-a threat not taken into consideration in the IA. Nor has account been taken of the intangible loss of the tens of thousands of former students who have attended our universities and colleges of further education all over the world and the links that they have with the United Kingdom.
	The Government's commitment to reducing immigration numbers, and their inability to attack other routes such as work or asylum, have led them to concentrate on education, relying on dodgy and unverifiable statistics and ignoring inconvenient responses to the consultation to arrive at conclusions already determined. I certainly hope that I am wrong in fearing the damage that may be caused by the measures that we are taking. I hope that my noble friend will be able to offer me an assurance that the Government will closely monitor the immediate effects of the changes in this and the previous statement on the higher and further education sector, and be prepared with remedial policies if it does turn out that we have impaired the contribution that they make to our economy by even more than the £2.4 billion we are already throwing away.

Lord Clement-Jones: My Lords, I should like briefly to add to the comments made by both my noble friends, with whom I am in total agreement. Indeed, I very much welcome today's debate. I declare an interest as chairman of the Council of the School of Pharmacy, University of London.
	It is already very clear through this debate that the process and outcome of the consultation, impact assessment and change in the rules have been grossly unsatisfactory. Although it was rather strange, I suppose that the qualified welcome given by some institutions to the March statement by the Home Secretary and the attendant statement of intent was explained by the fact that many in higher education were expecting worse. However, that does not mean that any of them are by any manner of means in agreement with the current state of play.
	I want to talk, in particular, about the closure of the post-study work route visa, on which I have asked quite a number of questions over the past two years. The Government's response to the Home Affairs Select Committee and correspondence to me from the immigration ministry are interesting in that they show that the Minister and the Home Office seem to have greatly underestimated the importance of the post-study work aspect of coming to a United Kingdom university.
	As vice-chairman of the All-Party Parliamentary China Group, I have had a great deal of contact over the years with Chinese students in particular. I believe that some 80,000 to 100,000 students from China are here at any one time. The opportunity to undertake what is essentially an internship with a UK business after graduating, to prepare for a career back in China, has played a very important part in the decision by Chinese students to come here. In the response to the Home Affairs Select Committee report, the Minister said:
	"We want to ensure students come for a limited period and to study not to work".
	In his letter to me of 27 July, the Minister put it rather differently:
	"Tier 4 should be about coming to the UK to gain a high-quality education and not about finding a route to work in the UK through undertaking a course".
	However, that completely misunderstands the reason for the post-study work route visa. It is a route to having brief work experience here in the UK and thereafter to working long-term back in the home country with the skills acquired.
	The tier 2 route visa will be granted only on a case-by-case basis. If we were able to unpack the responses to the consultation, which we are not, I am sure that a better solution could easily be found-certainly looking at the evidence to the Home Affairs Select Committee-to tighten up the PSWR mechanism under tier 4. That would be much more satisfactory. As it is, it will make our higher education institutions much less attractive to overseas students. As we know, and as has been mentioned by all speakers so far, the impact assessment for the new rules came out extremely late in a very unsatisfactory fashion. That, as we also know, was commented on by the Merits Committee on two occasions, and we now know that some £3.5 billion gross of income and economic activity could be at risk as a result. That potentially has a huge impact on our education sector and it puts that sector considerably at risk on the basis of little evidence of abuse of the post-study work route visa.
	It is right to say, as the Merits Committee does, that it is not clear from the impact assessment or the Explanatory Memorandum to the June statement how the findings from the consultation have fed into the development of the policy or the estimates of the costs and benefits of the changes. I think that that is an entirely uncontroversial statement in the light of what we have heard today. That is despite the statement in paragraph 8.1 of the statement of changes. As we know, the consultation was rushed through in only a month, which itself was grossly unsatisfactory and, sadly, these new rules have taken effect in those circumstances. It is vital that the new rules are kept under review and I hope that the Minister can give an undertaking that that will happen after a very short period of operation. It would have been better if these rules had not gone through but, on the basis that they have, I very much hope that the Minister can give an undertaking that such a review will take place.
	The experience of Australia is an extremely salutary lesson in these circumstances. When the Immigration Rules were changed, as the Home Affairs Select Committee reported, there was a slump in applications from overseas to Australian universities, from which they are still recovering.
	Finally, the Home Affairs Select Committee report, which is an extremely good document, said that the committee members were not persuaded that students are migrants. The Minister, in his reply to the report, said that he disagreed, claiming that the definition was long-standing under UN measures. That does not make it right. It is high time that rationality prevailed and that students are not regarded as migrants unless they are here for the longer term after graduating.

Earl Attlee: My Lords, I thank the noble Lord, Lord Hunt, for the opportunity to debate this Motion. A large number of points have been raised. I am eager to deal with the issues to which they give rise but clearly I shall have to deal with most of them in writing, as noble Lords have been quite wide-ranging.
	The Motion before us deals with changes to tier 4 of the immigration system covering international students. The issue at hand is how the findings from the consultation have fed into the development of the policy and the estimates of the costs and benefits of the changes.
	When the noble Lord, Lord Hunt, started, he told us about the importance of overseas students. He is, of course, quite right and I absolutely agree with him, but only in respect of genuine students who have come here to study at our world-class academic institutions. That is why we are devoting our attention particularly to the private education sector, where there is much abuse, although we are doing well to reduce it. However, I am at one with the noble Lord regarding universities. He will know that they enjoy considerable advantages under our policies. For example, we have introduced flexibility into universities on the English language requirements, on the ability to work and on the ability to bring in dependants.
	The noble Lord, Lord Hunt, talked about loss of income from the UKBA. Although there will be a reduction in fees paid to the UKBA, the agency has made allowance for this in its business planning. I hope that he agrees that the UKBA exists to keep our borders secure and not just to turn over visa fees. He claimed the credit for the previous action to deal with bogus students but the previous Government only started that and left this Government with considerable work to do.
	The noble Lord referred to the 35th report from your Lordships' Merits Committee, which states that:
	"The Committee regrets that it is not clear from the IA or the Explanatory Memorandum how the findings from the consultation have fed into the development of the policy or the estimates of the costs and benefits of the changes".
	Your Lordships will recall that the House debated the first set of changes to the student route on 16 May. At that time, the impact assessment for the student changes had not been published. However, the impact assessment for the changes to the student route was published when we made the second set of changes on 13 June. I reiterate my previous reassurance that we are quite clear that it is right and proper to provide the Merits Committee with the information necessary for it to do its job.
	However, the issue having been raised, it would be remiss of me not to put this again in the context of the previous practice in this area. While it is generally accepted as good practice, there is no legal obligation for the UKBA to consult on changes to the Immigration Rules. In March 2010, the previous Government made significant changes to tier 4-the student route-without a formal public consultation. Despite taking the views of key partners, they did not publish any formal explanation of the findings. Similarly, in March 2006, following consultation, the previous Government published their policy for a points-based system but did not publish the 517 consultations that they received.
	I am satisfied that this Government have gone to great lengths to seek the views of the public and of the sector, and to take account of these views in developing our final policy. On 23 November 2010, the Home Secretary informed Parliament that she intended to hold a public consultation on reforming the student visa system. This process began on 7 December, when the Home Secretary announced our proposals and the consultation paper was published. The consultation ran until 31 January 2011-shorter than a standard 12 weeks but that was in order to announce decisions at a time that would allow the sector and students to plan for the following academic year.
	Our consultation received over 30,000 responses-10 times as many as the consultation on economic routes-and officials spoke to representatives of over 200 institutions during the consultation period. On 22 March, the Home Secretary made a full statement in the other place setting out the detail of the Government's decisions, and the public reaction and data that had informed those decisions. On 31 March, we published a detailed statement of intent describing the full policy package and lay changes to the Immigration Rules to implement the first changes resulting from the consultation, which came into effect on 21 April. On 13 June, we lay the second set of changes to the Immigration Rules and published the impact assessment.
	It is true that, like the previous Government, we have not published every consultation response. As I mentioned, there were over 30,000 responses online and over 200 longer written responses. We published a summary of the online responses to all questions asked and answered in the consultation. We also indicated the level of support in relation to every response. We felt that this was helpful information for Parliament and interested parties to have. The government code of practice on consultations states that:
	"Following a consultation exercise, the Government should provide a summary of who responded to the consultation exercise and a summary of the views expressed ... Consideration should be given to publishing the individual responses received",
	but, in this instance, the volume of responses made that impracticable.
	The level of response demonstrates a high level of public engagement with the policy development processes. The changes that we have made to our final policy show that we have genuinely listened to and taken account of the views expressed. For example, we initially proposed raising the minimum level of English to an upper immediate level and required secure English language tests for all students. This received a clear, negative response from institutions, who indicated that pre-university pathway courses provided a vital route for international students to access our world-class universities.
	We initially proposed that all students should have to return overseas on completion of their course. Some 92 per cent of respondents disagreed with that proposal and the final policy instead puts a maximum limit on the time students can spend in tier 4. We proposed a wide reform of students' permission to work and again received significant negative feedback, with 85 per cent of respondents against the proposals. Instead, we have retained the previous system in the most compliant sectors while removing permission to work in those sectors where we account the most abuse.
	The impact assessment shows that we expect the full set of reforms to lead to a cumulative net reduction of around 230,000 migrants to the end of this Parliament, 2011-15. Once all changes have been implemented in 2013, we expect a reduction in net migration numbers of around 60,000 a year. However, it is important to note there is not a one-to-one relationship between the number of visas issued and the level of net migration. The volume of visas is larger as it includes students coming to study for less than 12 months.
	Once the system is fully implemented, we estimate that there will be around 70,000 fewer student visa grants a year and around 20,000 fewer visas issued to dependants each year. In addition, closing tier 1 post-study work in April 2012 but retaining a route into skilled, sponsored employment through tier 2 should result in 20,000 fewer each year staying in the UK to work. As a result of the transitional and full effects of the policy, we estimate that there will be around 260,000 fewer student visas granted and around 100,000 fewer visas issued to dependants-a total of 360,000 fewer by the end of this Parliament. In addition, closing tier 1 post-study work in April 2012 but retaining a route into skilled, sponsored employment through tier 2 should result in 80,000 fewer staying in the UK to work but with 25,000 fewer dependants by the end of this Parliament in 2015.
	On costs and benefits, the noble Lord, Lord Hunt, referred to the financial considerations. The impact assessment shows that the changes are estimated to have a net cost of £2.4 billion to the UK economy. We estimate that the policy proposals will lead to £1.1 billion of benefits but £3.6 billion of costs, of which £840 million is savings to public services. However, the noble Lord will be aware that a significant proportion of this impact results from less work being done by students, post-study workers and their dependants, whether this work is legitimate or not. The impact would be lower if some of this work is instead done by non-migrant workers. We have commissioned the Migration Advisory Committee to look into this. The MAC has access to the appropriate economic expertise. In the mean time, we have costed a worst-case scenario.
	The institutions that will no longer be able to recruit migrants will lose fee income but our view is that the policy strikes the right balance between support for British educational institutions and the need to reduce migration to manageable levels and cut out abuse of the student route. The committee has recognised the difficulty in estimating likely costs and benefits. The impact assessment drew from a range of sources but did not specifically draw on the consultation responses. Other, more established data sources were used as they were more likely to be representative of a diverse sector.
	I would not want the House to think we are dismissive of the Merits Committee's comments. The Merits Committee provides an invaluable service to Parliament and the public, and we have taken on board its comments in the spirit in which they are intended. I reassure the chairman, my noble friend Lord Goodlad, that the Home Office will always be happy to provide the committee with more information wherever it is possible and reasonable to do so. Ministers will work hard to ensure that that happens.
	The noble Lord, Lord Hunt, asked how the consultation responses were incorporated into the students' IA. Very few of the consultation responses provided information directly relevant for the numbers in the impact assessment. Most responses focused on the policy itself. Of those that did, they either confirmed the uses of sources already used or were judged to be unrepresentative of a diverse sector.
	The noble Lord suggested that the numbers differed from the Government's earlier estimates. There are indeed differences between reductions in net migration and reductions in visas. We estimate that in 2013, once all changes have been implemented, there will be a reduction in net migration of around 60,000 a year. For the same year, we estimate a reduction in visas and in-country grant of around 70,000 for students, 20,000 for post-study workers and 30,000 for dependants.
	My noble friend Lady Hamwee asked about low-risk countries. The UK Border Agency does not base decisions on the nationality of the applicant. All applicants are judged against objective measures. Low-risk nationals are given a streamlined process, but the underlying criteria remain unchanged.
	My noble friend Lord Avebury asked about student visitor extension to 11 months and whether this creates a loophole. The student visitor is a secure route. The UK Border Agency officials, both overseas and in the UK report, retain the right to refuse any student visa application on credibility grounds. If they believe that the applicant does not genuinely intend to study-and we will monitor closely the numbers of students making use of this extension-they will take action at signs of abuse. We plan to decide the future of the route once it has been operating for 12 months.
	My noble friend Lord Avebury asked about the management of the UKBA. The Home Office has made a recent change to bring the strategic immigration policy back within the core Home Office.
	My noble friend Lord Avebury reminded us that fee increases made it hard for students to make ends meet, or words to that effect. However, he will be aware that overseas students are expected to be able to provide for themselves without working. Paid work is only to supplement this and to give them experience of UK life.
	My noble friend also asked why we are asking the QAA and the Independent Schools Inspectorate to inspect private colleges, and whether we will reinstate the British Council or Accreditation UK. We did consult on a new inspection regime. Under tier 4 we have seen that the level of compliance has been closely aligned to the type of institution, with far higher rates of abuse to be found in the privately funded sector, with up to 26 per cent of students found to be non-compliant in one study. The previous system was based on accreditation by sector bodies, and this has proved to be inadequate. Therefore we are moving to a system of more rigorous inspection carried out by fully independent bodies that have previously inspected the sectors with the highest levels of compliance, namely the public-funded providers and independent schools. The ISI's framework and standards have been scrutinised by Ofsted to ensure that they are appropriate and rigorous. We do not plant to reinstate Accreditation UK or the other accreditation bodies.
	Noble Lords have made several other points. As I have already indicated, I will respond to them in writing. I reiterate that the Government have gone to great lengths to seek the views of the public and the sector, and to take account of those views in developing our final policy. In the light of this thorough approach to consultation and an explanation of our calculations, I hope that the noble Lord, Lord Hunt, will feel able to withdraw his Motion.

Baroness Hamwee: My Lords, I wonder if the noble Earl could clarify-if not now, then at a later time-the basis of the use of the responses to the consultation. I was not entirely clear whether he was saying that it was factual information that was not used, and that other sources were used, or whether it was something wider than that.

Earl Attlee: My main point was that the consultation was responding to the policy rather than giving us detailed data on the likely effect of the policy.

Lord Hunt of Kings Heath: My Lords, I am most grateful to the noble Earl, Lord Attlee, who seems to be working very hard today.
	First of all, I echo the point made by the noble Baroness, Lady Hamwee, about the work of the Merits Select Committee, of which she is a distinguished member. It is very difficult for noble Lords to go through all the statutory instruments and statements of changes, and without the Committee we would be in a very difficult position as far as parliamentary scrutiny is concerned. Essentially this debate is about two issues. One is parliamentary process and the information provided by the Home Office; and it is also about the policy. On the issue of parliamentary process, it is very important that the Home Office learns lessons from the way in which this statement and previous statements have been produced for when further changes in Immigration Rules are brought before your Lordships' House.
	The noble Lord, Lord Avebury, has said that this is not the first such occasion, and indeed it is not. We come back consistently to this House to debate these changes because of the inadequacy of the department's approach. The noble Earl said that his department readily takes on board the points made by the Merits Select Committee, but so far it has not. We continuously come back to debate these issues because the Merits Select Committee has identified inadequacies in his department's approach. I have very little confidence that we will not be back in another few weeks with further discussion on the same basis.
	The noble Earl has kindly offered to write to noble Lords on points to which he has not responded-he always does and it is appreciated-and I hope that his department will take this to heart. I thought it was very interesting when the noble Baroness, Lady Hamwee, said that the problem with the IA was that it only had two options: the do-nothing option, or the option of taking what the Home Office wants to do. Rather surprisingly, the Government have come to the view that the Home Office got it right in the first place. I am sure that we are all reassured that, after rigorous consideration of the Home Office's original proposals, they have indeed, through the IA, come to the view that that is the right approach. Normally on IAs, one seems to get a series of options where I think one can get a more considered view, and I would hope for that in the future.
	I too would pay tribute to the ILPA. I thought that the briefing paper it produced for us was, as ever, very comprehensive. Very interesting were the examples that it gave of people who would be badly affected by these proposals and changes. I hope that the noble Earl will have some time to have a look at these examples, because I think that they bring home to us how these changes can have a real impact on people from other countries.
	The noble Lord, Lord Avebury, spoke about the impact of English language schools, and I agreed with everything that he said. I thought that he put a very pertinent point to the noble Earl about the proposal to change from the accreditation scheme to the monopolistic provider that is now going to be provided in relation to inspection, which will be very expensive indeed. The noble Earl gave the reasoned response that he thought this was going to be a more effective and more rigorous scrutiny. I hope that the noble Lord, Lord Avebury, might feel able to bring this back in some form because I think that it warrants further debate. I am particularly worried about the monopolistic issue and the cost, and I hope that there will be an opportunity to debate this further in due course.
	I very much agreed with the noble Lord, Lord Clement-Jones, who spoke from his experience of the School of Pharmacy. My experience is particularly in the health field. Throughout the world we have wonderful contacts with healthcare systems in other countries, and it is because we have always had this marvellous open door, with people from other countries who often come to help the NHS. My fear is that it is not just the change in the rules that will make a difference but the change in the atmosphere; people from other countries will get the feeling that they are no longer wanted here to study, and that is a major concern.
	I also agreed with the noble Lord, Lord Clement-Jones, about the post-study work visa. It is part of a package. This does impact on the brightest and the best, however we define them-that if they are able to undertake some work experience before they go home, it is extremely valuable to them. If they cannot, it actually undermines the qualification that they receive in the UK. I cannot see the problem in them being able to undertake some work experience. It is not that they are taking away work from indigenous members of the population; it is simply that it is part of the package. I have met many of these students and I know that they are not seeking to abuse the system by staying on here and working. It is essentially part of the credibility of the educational package that is on offer.
	On dependants, I have met many of the mature students. They are not students in our terms; they are not 18 year-olds, but mature people who often have partners and families. We need to be somewhat more sympathetic to their needs. Why should it be a matter of concern if they bring dependants with them while they study on these courses?

Earl Attlee: My Lords, it is because the route has been abused.

Lord Hunt of Kings Heath: Yes, my Lords, but surely the point is to deal with the abuse in a holistic way and not stop legitimate people coming here. I fear that the changes will have that dampener impact. I really do.
	On the question of consultation, I, like the noble Baroness, was rather confused by the Minister's response. The Government seem to dismiss these responses because they commented on the policy or because they were unrepresentative. I do not know who decided that they were unrepresentative; it is almost as if the Government have decided that anyone who does not like the policy should not be listened to because they are unrepresentative. I just point out to him-and I am indebted to my noble friend Lord Rosser for referring to this-that the Merits Committee in paragraph 10 says that the committee very much regrets the lack of information and how the findings from the consultation fed into the conclusions and estimates that the Government have made. As the committee says,
	"the estimation of costs to educational establishments would benefit from",
	consultees, and it is,
	"regrettable as the Government presumably received some useful information given that the consultation specifically asked about the main advantages/disadvantages of the changes".
	If you are commenting on the general policy, I would have thought that you were actually talking about the main advantages and disadvantages of the changes. That really gives the game away. The fact is that all those legitimate organisations involved in education know that this has been a disastrous change in policy; they told the Government that and the Government take no notice. No wonder they have not fed that into the results of this statement of changes.
	This has been a thoroughly good debate. Once again, the Government have found themselves rather lonely on this policy. That is because this policy is wrong and highly damaging to this country. I of course withdraw the Motion, but I hope that the Government will listen to what noble Lords have said tonight.
	Motion withdrawn.

Localism Bill
	 — 
	Report (2nd Day) (Continued)

Amendment 82
	 Moved by Lord Best
	82: After Clause 172, insert the following new Clause-
	"Community land trusts and leasehold enfranchisement
	(1) The Housing and Regeneration Act 2008 is amended as follows.
	(2) After section 302 insert-
	"302A Community land trust and leasehold enfranchisement
	(1) Regulations may make provision for securing that in prescribed circumstances-
	(a) an enfranchisement right is not exercisable in relation to dwellings owned (whether freehold or leasehold) by a community land trust as defined in section 79 of this Act, or
	(b) the exercise of an enfranchisement right in relation to that land is subject to modifications provided for by the regulations.
	(2) Each of the following is an "enfranchisement right"-
	(a) the right under Part 1 of the Leasehold Reform Act 1967 to acquire the freehold of a house (enfranchisement),
	(b) the right under Chapter 1 of Part 1 of the Leasehold Reform, Housing and Urban Development Act 1993 (collective enfranchisement in case of tenants of flats), and
	(c) the right under section 180 of the Housing and Regeneration Act 2008 (right to acquire social housing).
	(3) The regulations may-
	(a) confer discretionary powers on the Secretary of State, a community land trust or any other specified person, and
	(b) require notice to be given by a community land trust in any case where, as a result of the regulations, an enfranchisement right is not exercisable or is exercisable subject to modifications.""

Lord Best: My Lords, this amendment is about community land trusts and enfranchisement. Community land trusts acquire land from benevolent landowners or public bodies with a social concern free of charge or at a much reduced price. They then build homes for renting and shared ownership using the cheap or free land as the subsidy that makes the homes affordable. This means that they can keep the homes as affordable to those on modest incomes for present and future generations. They are very local, although they may use a housing association to help them; they work with the planners, the parish council, the landowner and volunteers. Very often they are self-help organisations in which future residents play a major part.
	The community land trusts are real big society stuff. However, they have a problem in relation to the Leasehold Reform Act 1967, which entitles the occupier to acquire the freehold and remove thereby the opportunity for others in future to benefit from the initial gift or concession on the land price. Similarly, the right to acquire under the Housing and Regeneration Act 2008 can remove the property from its original purpose. This amendment seeks to protect the homes built through community land trusts from legislation that can undermine the whole basis on which they are set up to operate. It is not a denial of rights of tenants or shared owners, because those moving in are very willingly, indeed enthusiastically, signing up to getting homes that they could not otherwise afford. They do so in the full knowledge that they will benefit from the excellent accommodation, but any capital gains that they might make will not include the appreciation of the land value.
	The community land trust approach, which is being used in east London as part of the Olympic legacy measures, as well as in rural areas, where benevolent landlords are making land available on highly beneficial terms, deserves our support. Removal of the enfranchisement arrangements, which were never intended to cover circumstances of this kind, seems essential to secure their future. Homes developed under the community right to build, of which I am also very supportive, will have the benefit of an exemption from the leasehold enfranchisement arrangements. This amendment would give the same exemption to community land trusts. I understand that the National CLT Network Board, which seeks to promote local community land trusts, has been advised that the local projects could convert into community right to build organisations, which would solve their enfranchisement problem. The community right to build schemes require a majority of the governing body to be local residents. This might not be an insuperable problem for a community land trust, as they are often extremely local, but the community right to build route requires that the project must eventually go to a referendum before proceeding, even if the parish council and planning authority and everyone else is very happy with it. That can be very worrying for landowners, local volunteers, prospective residents and lenders to the project. It means uncertainty, delay and possible local conflict. It would seem far simpler, less bureaucratic and more likely to encourage gifts of land and engage those big society volunteers locally if community land trusts could be taken out of the enfranchisement legislation, as this amendment proposes.
	I know that Ministers are supportive of the community land trust approach and I assure them that acceptance of an amendment along these lines would be enormously important and greatly appreciated by all the supporters of this excellent way of creating affordable housing and guaranteeing its affordability in perpetuity. I beg to move.

Lord McKenzie of Luton: My Lords, I thank the noble Lord, Lord Best, for introducing this amendment and for his description of the Community Land Trusts approach. We have a good deal of sympathy with the thrust of this because we have seen the benefit of the Government's reply to the amendment in the document they issued in August. Of course, this was one of the amendments that was withdrawn at the last stages of Committee.
	As we have heard, these powers seek to replicate provisions already in the Bill relating to community right to build orders. The amendment seeks to remove enfranchisement rights in respect of dwellings owned by CLTs, and enfranchisement rights give leaseholders the right to acquire freeholds in certain circumstances-legislation, as the noble Lord referred to, that was started by the Leasehold Reform Act 1967, but I think those opportunities have been greatly extended since.
	As I understand it, the gist of the Government's position appears to be that CLTs do not necessarily have the same level of community engagement as bodies do under the community right to build provisions, which are proposed by the community, supported by the community, subject to a community referendum. However, where the CLT does satisfy the level of community engagement, it will be able to apply for a community right to build order and thereby obtain the benefit of disapplication of enfranchisement rights. But I am bound say, therefore, that I am not sure why, where there are circumstances that permit this, they could not be described in the prescribed circumstances that the noble Lord is seeking in his amendment. Proposed subsection (1) says,
	"regulations may make provisions for securing that in prescribed circumstances, an enfranchisement right"-
	et cetera. So why could what the noble Lord describes not be encompassed in that way?
	I think that the noble Lord makes a good point about referendums in relation to community right to build orders. In circumstances where there is clearly a very high degree of support for a project, why indeed put the project through the process, cost and challenges that this entails? It does appear that one way or another there is a route to the result that the noble Lord is seeking, which is all well and good, and I agree that we should not be seeking to remove enfranchisement rights lightly-these are important rights. I think that he has described fully why they should be removed in these sorts of circumstances.
	I therefore support the thrust of the noble Lord's amendment. I believe that they should not be forced through the community right to build process just to achieve the outcome here and that it could be dealt with by regulations that, as his amendment suggests, fully cover the situation.

Earl Attlee: My Lords, enfranchisement rights are an established and significant right, and removing them must not be undertaken lightly. We expect to use the community right to build powers to ensure that the enfranchisement rights are only removed where the proposal is by the community, for the community and has the backing of the community through a community referendum, as identified by the noble Lord, Lord Best.
	I understand that the regulation-making power provided for by the amendment is expected to be used to disapply enfranchisement rights simply where a CLT is the landlord of the property. There is, however, no requirement for a CLT to be made up of members of the community and there is no requirement for a community referendum. This means that a CLT development may not be proposed or supported by the community. I am afraid that the removal of these significant rights cannot be justified. The design of the community right to build will allow the majority of CLTs to apply for a community right to build order. As such, they will be able to benefit from the disapplication of enfranchisement rights under a community right to build order, again as explained by the noble Lord, Lord Best. With these reassurances, I hope that the noble Lord is willing to withdraw his amendment.

Lord Best: I am willing to withdraw the amendment but I am not entirely reassured. The removal of rights implies that the people moving in believe themselves to have earned new rights-the right to enfranchise and make capital gains-which is entirely contrary to the position that they in reality face. They know that they are entering this scheme, acquiring an affordable home that they could never possibly afford otherwise, and the terms are that they will not gain from the capital growth in the value of the property. That is a very fair deal for them to be part of, and I do not think that it is a removal of rights to say that they cannot enfranchise thereafter. It is a willingly-entered-into arrangement. So, although at this late hour I am very happy to withdraw this amendment, I am not entirely reassured by the noble Earl's reply, for which I am grateful, as I am for the support from the noble Lord, Lord McKenzie.
	Amendment 82 withdrawn.
	Amendment 83
	 Moved by Lord Kennedy of Southwark
	83: After Clause 172, insert the following new Clause-
	"Homes and Communities Agency: annual report
	In Schedule 1 to the Housing and Regeneration Act 2008 (the Homes and Communities Agency), after sub-paragraph (1)(a) of paragraph 11 insert-
	"(aa) state within the report, in particular, the total number of new properties delivered during each year, also specifying, in respect of new properties in the area of each local housing authority-
	(i) how many are located within a settlement of fewer than 10,000, and fewer than 3,000, inhabitants;
	(ii) the number let on long leases, fixed-term shorthold tenancies, and periodic tenancies;
	(iii) levels of rent;
	(iv) the number designed for use as housing for older people;
	(v) the number designed for use as housing for other vulnerable groups;
	(vi) the size as defined by the number of bedrooms;
	(vii) information on such other categories as may appear to the HCA to be appropriate or may be specified by the Secretary of State.""

Lord Kennedy of Southwark: My Lords, my amendment is quite simple and seeks to place an obligation on the Homes and Communities Agency to produce certain information in its annual report. All the information, I understand, is available, some I accept is already published at least every year, and in some cases at least every six months. Having said that, I do not accept that this would be an unmanageable burden or that it is unnecessary or inappropriate to require the agency to produce such information in its annual report. I would contend that this is just the sort of information that the HCA should be including in their annual report. It is also valuable in the review document for the organisation that they clearly detail the number of new properties they have delivered on, what the level of rents are and who they are serving.
	This amendment was tabled in Committee but not taken. If the noble Earl is not minded to accept it, in what other ways will the Government ensure that this important information gets out there? While it is one thing to say that the information is already out there, if you are not sure where it is, how it is collected or where it is located in the first place-or whether it is in a number of different places-then getting all the information, making comparisons and being able to comment with an informed mind becomes much more difficult. I beg to move.

Earl Attlee: My Lords, the noble Lord described his amendment as simple; experience shows that simple amendments can sometimes be the most dangerous. The information that this amendment would require to be included within the annual report is either reported on already or is available to members of the public, should they request it. For example, information on the total number of homes delivered each year is provided in the HCA's official statistics, which are published every six months. The HCA also collects information on the number of habitable rooms per property and reports this to my department. No doubt if other types of information became desirable to collect, they would be collected without the need for any legislation.
	I do not believe that it is necessary to prescribe in statute that these specific information requirements are included in the HCA's annual report when the information is either already being collected and reported on or can be made available through existing channels. For these reasons, I hope that the noble Lord will withdraw his amendment.

Lord Kennedy of Southwark: My Lords, I thank the noble Earl for his response. Again, we are not going to agree on this. I am very worried that sometimes if the information is out there but you cannot find it or do not know where it is, there is an issue. People should be able to use and comment on it. Having said that, in this case I am prepared to withdraw the amendment.
	Amendment 83 withdrawn.
	Amendment 84
	 Moved by Lord Shipley
	84: After Clause 172, insert the following new Clause-
	"Leases to which section 11 of the Landlord and Tenant Act 1985 applies: general rule
	In section 13(1) Landlord and Tenant Act 1985 (leases to which the provisions about repairing obligations in section 11 of that Act apply) after subsection (1) insert-
	"(1A) Section 11 also applies to any lease of a dwelling house granted on or after the day on which section 173 of the Localism Act 2011 came into force, for a term of less than 21 years.
	(1B) Section 11 also applies to a right of occupation given by contract or any enactment and not amounting to a lease as if the right were a lease; and "lease" and cognate expressions shall be construed accordingly.""

Lord Shipley: My Lords, in moving Amendment 84 I shall also speak to Amendments 86 to 90. These all relate to the standards of accommodation and repairing obligations. Amendment 84 will ensure that all tenants and other occupiers of housing with short terms have the benefit of repairing obligations. The Landlord and Tenant Act 1985 provides that the implied repairing obligations set out in its Section 11 only apply to leases of less than seven years. This Bill proposes to apply that Section 11 to secure and assured fixed-term tenancies of more than seven years to take account of the fact that the new, flexible tenancies may be granted for longer than seven years. The proposed new clause in my Amendment 84 gives all the tenants of all short leases of less than 21 years the benefit of implied repairing obligations, so this amendment is important.
	Amendment 86 relates to the same Act, which currently provides that those who have previously held a lease for more than seven years and who have not previously had the benefit of the repairing obligations by landlords will still not gain the benefit of such obligations if they renew their lease with one of less than seven years. There seems to be no justification for excluding any short leases from the repairing obligations, which should surely apply to new short leases, irrespective of what length the previous lease was. This amendment would achieve that result.
	Amendment 87 would make landlords responsible for repairing furniture, fixtures, fittings and appliances in furnished lettings. Section 11 of the Landlord and Tenant Act 1985 implies repairing obligations into all leases of less than seven years in those granted since 24 October 1961. They are required to,
	"repair the structure and exterior of the dwelling-house",
	and,
	"to keep in repair and proper working order the installations in the dwelling-house for the supply of water, gas and electricity and for sanitation".
	However, it makes no provision in relation to any furniture, fixtures, fittings or appliances provided by landlords in respect of furnished dwellings, such as beds, sofas, cookers, fridges and so on.
	Although most people would expect landlords to be responsible for the furniture and fittings that they have supplied in furnished dwellings, few tenancy agreements-even those of social landlords-impose any specific repairing obligations in this respect. Most furnished lettings are granted by private landlords whose tenancy agreements often make no reference to repairing obligations at all. However, where there is any such reference it is usually only one to the terms implied by Section 11 of the Landlord and Tenant Act 1985. In the absence of any specific term in the tenancy agreement covering furniture and so on, there is no obligation upon a landlord to repair or keep in working order the furniture or fittings that she or he has supplied. It is sometimes possible to argue for an implied term to make the landlord liable to repair in this situation, but this leaves the position uncertain and unnecessarily complicated in this regard.
	The proposed amendment would ensure that the legal responsibility for furniture, fittings, fixtures and appliances in furnished tenancies falls where it should lie: namely, upon landlords. Given that furnished tenancies are usually short term, it is completely unrealistic to expect tenants to carry out such repairs themselves. These repairing obligations should fall on the landlord, not the tenant. This amendment would ensure that this was the case.
	Amendment 88 would ensure that all tenants can live in housing that does not injure the occupier's health. Again, it refers to the same Landlord and Tenant Act and the same obligations. The courts have decided that the obligation to repair arises only where there is disrepair-namely, where there has been deterioration from some former condition. As such, the obligation to repair does not usually cover design defects. However, sometimes unhealthy housing conditions arise not from disrepair but from design defects. The most common example is condensation dampness which occurs as a result of the construction of a dwelling house; namely, through inadequate insulation, ventilation and/or heating, and not because of any disrepair to the structure or the installations supplied. The point is extremely important because currently tenants living in unhealthy conditions which arise as a result of design defects are unable to take any civil action to ensure that these conditions are rectified. While it may be possible for tenants to take action in the magistrates' courts under the Environmental Protection Act 1990, no public funding is available to take such cases. Local authorities can also bring proceedings under the 1990 Act but, of course, are unable to bring proceedings against themselves.
	Amendment 88 would enable tenants to take civil proceedings in order to make their landlords rectify design defects which render the premises injurious to the health of the occupiers. It seems only right in the 21st century that tenants of residential accommodation should expect to live in accommodation that does not injure their health and should be able to take steps to rectify the defects giving rise to these conditions whatever the cause. In relation to the installations in a dwelling house, tenants are already able to take civil action to rectify design defects which result in the specified installations not being in proper working order. They should also be able to take action when the defects affect, or will affect, their health.
	The public spending implications of this are not great because the decent homes standard has improved the public housing stock. The main benefit of this amendment would be private tenants of rogue landlords, where the worst of the housing stock now rests. Indeed, giving such tenants a private remedy could reduce public spending because it would take some of the pressure off hard-pressed local authorities, which have the job of enforcing the housing standards in the Housing Act 2004, and could also provide savings to the National Health Service. The current necessity to draw a distinction between disrepair and design defects, as opposed to simply concentrating on the effects on the occupier, makes the law in relation to repairs unnecessarily complicated and results in the need for expert evidence on the cause of the problems. Removal of the distinction would greatly simplify the law in relation to disrepair. This proposal would therefore benefit not just those tenants who are presently living in unhealthy housing conditions but the civil justice system as well.
	Amendment 89 would make landlords responsible for the repair of installations for ventilation, particularly extractor fans. The Landlord and Tenant Act 1985, as currently enacted, makes no provision in relation to installations for ventilation, save in respect of windows. Lack of ventilation is a common cause of condensation dampness in dwelling houses and is often prejudicial to health. Over the years many properties have been fitted with extractor fans in order to combat this problem. However, there is presently no obligation on landlords to keep such installations in repair or proper working order unless this is expressly provided for in the tenancy agreement. Few tenancy agreements, even those of social landlords, make specific reference to extractor fans, with the result that tenants have no remedies when extractor fans break down or do not work properly. Given that extractor fans are usually fitted by landlords, the responsibility for repairing them should fall on the landlord, not the tenant. This amendment would ensure that this was the case.
	Finally, Amendment 90 seeks to ensure that all tenants and other occupiers of housing can live in housing that is fit for its purpose. In 1996, the Law Commission recommended that, subject to certain exceptions, an implied term of fitness should be imposed on all tenancies of less than seven years. This proposed new clause goes a little further in that it would apply the term not only to tenancies but to licences. It seems only right that any occupant of residential accommodation should be able to expect accommodation that is free from damp and has natural lighting, ventilation, a water supply and other basic facilities for sanitation and the cooking of food. At present, the other main repairing obligation in Section 11 of the 1985 Act is confined to matters of disrepair. Therefore, if a property is unfit in the respects mentioned above because, for example, of design defects, the occupier has no remedy. That cannot be right. A house with no damp-proof course could be rendered so damp as to cause the tenant pneumonia but there would be nothing in the tenancy agreement to compel a landlord to install one. On the other hand, if there was a damp-proof course in place that had failed through disrepair the tenant would have a contractual remedy. That is an absurd anomaly.
	Public spending implications again are not great because a decent home standard has improved the public housing stock. Again, the main benefit of this amendment will be private tenants of rogue landlords, where the worst of the housing stock now rests. Indeed, giving such tenants a private remedy could reduce public spending because it would take some of the pressure from local authorities who have the job of enforcing housing standards in the Housing Act 2004.
	In the recess, my noble friend the Minister replied to me following Committee stage. I should like to pursue a sentence in the letter that I received because it caused me some concern. I am sure that that was unintended but we need to clarify the record. In terms of repairing obligations on landlords, the letter states that,
	"where there is no evidence to the contrary I am not prepared to increase burdens on landlords with the attendant risks for growth in the sector".
	It is inevitable that the private rented sector will grow but I am puzzled by what I would regard as the basic standards of accommodation, with basic attention to repair and maintenance of properties and enabling people who are tenants to live in accommodation that is fit for purpose. I do not see that as a risk for the sector. People have a right to expect a basic standard of accommodation and I hope very much that my noble friend will put my mind at rest and confirm that there should be applied a basic standard that needs to be delivered through amendments to the law. At present, too many private sector rented accommodation units are falling through the legislation that currently exists because it has not been modernised-well, in the past 25 years-to a standard that would reflect current modern needs.

Lord Beecham: My Lords, Newcastle is once again united. We are even more united now than we were under the previous Administration. I congratulate the noble Lord, Lord Shipley, on tabling these amendments and equally congratulate those who have briefed him so thoroughly with the material that he has brought to your Lordships' House today. He has highlighted an important area of the national housing debate which has been subordinated in recent times to the simple question of household numbers, housebuilding and the long queue of people denied access to accommodation, including first-time buyers and their problems. Much of the emphasis has been simply around numbers and the owner-occupied sector.
	The real problems addressed by the noble Lord's amendments are to be found essentially in the private rented sector, which has received insufficient attention for many years under Governments of both parties, with the result that, as the noble Lord pointed out, far too many people are living in unsatisfactory accommodation. We are living in a letters' market, as it were. Demand for rented accommodation is going up all the time and obviously property numbers are not going up to match. Reputable organisations are anticipating additional problems when changes in housing benefit come in, and already there is some indication that private landlords are reluctant to let to housing benefit tenants. There is huge pressure within this sector. As the noble Lord pointed out, that sector has much the highest rate of disrepair and the least degree of modernisation through to decent home standards. Therefore, there is a huge need for concentration on these problems. The very basic matters to which the noble Lord referred must be an essential part of the responsibility of any landlord.
	There will be a slight irony if the Government resist the amendment. If the exterior of a property was at issue, Town and Country Planning Acts would apply. Owners can be made to tidy up the outside of their property, and even paint it, whatever the length of tenure or even if it is owner-occupied; but when it comes to the inside, as the noble Lord pointed out, these powers do not exist for far too many properties. Therefore, there is nothing wrong in principle with imposing obligations on owners-in this case, renting owners-because they are applicable to all owners as far as concerns the property exterior. One might have thought that, from the point of view of safety and health, the interior is more important. It is perfectly logical that legislation should be amended in the way proposed by the noble Lord.
	I will sound a cautionary note. The noble Lord referred to the availability of civil proceedings once the measures pass into law. Again, I remind noble Lords that access to the courts by this group of potential litigants is likely to be affected by the pending changes to legal aid. If current proposals go through, only under exceptional circumstances will legal aid be available to assist tenants in enforcing repair obligations of this kind. Perhaps that should be borne in mind in future debates. I hope that the noble Lord and his colleagues will join Members on all sides of your Lordships' House in investigating those steps very thoroughly, because these matters are not divisible. If we are looking at the housing situation holistically, we must look not only at obligations but also at methods of enforcement. The noble Lord touched on them. We must be sure that those methods remain available to the people who will need them.
	I hope that the Minister will respond sympathetically to the suggestions contained in the amendments. I represent an area that has a significant private rented accommodation sector. There are a number of very poor landlords and a licensing scheme that is beginning to have some impact. I hope that that experience, which is reflected in many places, will be improved by the Government giving fair wind to the noble Lord's proposals.

Lord Kennedy of Southwark: My Lords, I will speak only very briefly in this debate as the Newcastle duo-the noble Lord, Lord Shipley, and my noble friend Lord Beecham-have covered the matter thoroughly. We support the thrust of the amendments tabled by the noble Lord, Lord Shipley. They address real issues and I am grateful to him for raising them. I look forward to the response of the noble Lord, Lord Taylor.

Lord Taylor of Holbeach: Well, my Lords, the noble Lord, Lord Kennedy, and I know that when the Toons are on the run we are in a bit of trouble. However, I welcome the chance to address my noble friend's amendments, because the debate draws attention to the very important issue of the quality of our housing stock, in particular the rented sector. My noble friend's amendments are all interrelated. They argue a case that unfortunately the Government cannot accept. We believe that the current division of responsibilities and obligations between landlord and tenant is the right one. Having said that, we are not complacent on the issue.
	The main focus of my noble friend's amendments is to allow tenants to take action through the civil courts against a landlord who fails to provide safe accommodation. His proposals draw attention to concerns about the condition of some of the housing offered for private rent. There is some evidence that the stock is improving, but we are all keen to see more improvements. However, a mechanism already exists by which tenants can be safeguarded. It has not been mentioned by any noble Lord contributing to the debate. The Housing Act 2004 introduced the housing health and safety rating system-HHSRS, as it is commonly known. The HHSRS applies to all private sector housing regardless of tenure. It provides a framework within which a local authority can inspect a home and assess it against 29 hazards. I shall not list them-I do not actually have them to hand-but they include exactly the sort of situation which my noble friend is talking about: damp and mould, dangerous fumes, hazards of falls and matters concerning the facilities for domestic and personal hygiene. It therefore largely covers the types of hazards which are of concern to my noble friend. Where a local authority discovers such a hazard in someone's home, depending on its severity, it has a range of powers at its disposal. It can make a hazard safe and charge the landlord or require the landlord to make repairs. Where a landlord does not comply, he can receive a heavy fine and a criminal conviction can follow. All this can be triggered simply by a tenant complaining to the local authority, in contrast to the legislation which my noble friend seeks to amend which is dependent on the tenant taking the landlord to court. The noble Lord, Lord Beecham, referred to the cost, time and difficulty of any legal process. Given that these safeguards already exist as a result of the measure introduced by the previous Government, I ask my noble friend to withdraw his amendment.

Lord Shipley: My Lords, I am glad that the Minister is not complacent, but I think that this issue is not being taken seriously enough by the Government and that there will be increasing problems in coming months and years because of the rise in demand for private rented stock. With the law so inadequately defined in so many respects around things such as extractor fans, furniture, fittings, damp courses and so on, one of the consequences will be that conditions in the private rented sector are going to worsen. For that reason, I continue to believe it to be absolutely right that the Government have the responsibility to do something about it.
	All these amendments are directed in part by a lack of clarity in the law. I entirely understand what the Minister is saying about the recourse people currently have to potential remedies, particularly through local councils, but the difficulty is that there are problems in the interpretation of the law-for example, between design defects and defects that occur because repairs need to be undertaken to an existing fitting. These are material considerations for a Government who are concerned, for example, about standards of public health. I shall withdraw the amendment, but I hope we can engage in further discussion about some of the issues that have been raised.
	One of the problems that we have at the moment, being on Report on a matter that was not debated in Committee, is that we have not had the benefit of that further discussion. It has occurred here and in other amendments, and it may yet occur in one or two further amendments. That is a defect in our procedures because we have not had the time to do justice to some of the housing amendments. That having been said, and in the expectation that we can engage in further discussion on these matters, I beg leave to withdraw the amendment.
	Amendment 84 withdrawn.
	Amendments 85 to 90 not moved.
	Amendment 91
	 Moved by Lord Shipley
	91: After Clause 172, insert the following new Clause-
	"Standards for private sector lettings and management agents
	The Secretary of State may by regulations set the standards that private sector lettings agents and management agents must adhere to."

Lord Shipley: My Lords, I shall also speak to Amendment 92. Amendment 91 would insert a new clause to give power to the Secretary of State to lay down in regulations the standards that private sector letting agents and management agents must adhere to. This would enable the Secretary of State, at a later date, to lay down statutory guidance to regulate private letting agents. A similar provision was passed recently in Scottish legislation. As there are currently no regulations governing the conduct of letting agents, such a clause would act as a starting point for a debate on what sort of regulation would be effective.
	Both tenant and landlord organisations have long reported problems with private sector letting agencies, including the charging of exorbitant fees, failure to enforce basic health and safety standards in properties and inadequate client money protection provisions. The situation is such that the largest professional body for letting agents in the UK, the Association of Residential Letting Agents, which has been at the forefront of self-regulation, is strongly in favour of statutory regulation to tackle problems in the industry. This amendment is also supported by the British Property Federation, the National Landlords Association and housing charities.
	The amendment would allow the Secretary of State, following further consideration and consultation, to specify new standards for the regulation of letting agents. It does not require guidance to be drafted immediately but ensures that the possibility is open, and will act as a starting point for a debate on how best to regulate the sector. There would of course have to be wide consultation on the scope and nature of any regulations, but the Bill is likely to be the best legislative opportunity to make progress on this issue for a significant period.
	Around 60 per cent of private landlords use one of the estimated 8,000 letting agents or managing agents in England. However, half these agents do not belong to any of the professional trade bodies. Research has shown that tenant satisfaction levels are lower-reportedly 71 per cent-where the property is managed by an agent than where it is managed by a landlord directly, reported to be 81 per cent. In an online survey of 1,289 tenants who visited the Citizens Advice website over a three-month period, it was found that 73 per cent were dissatisfied with the service provided by their letting agent. Less than one-third of agents willingly provided full written details of their charges to CAB workers when asked. There are particular concerns in relation to letting and management agents having a lack of expertise and firms not having professional indemnity insurance or client money protection.
	The current voluntary approach has significant drawbacks, with the worst agents being the least likely to submit to a voluntary scheme. Voluntary regulation, covering only an estimated half of all agents, is unfair, as it creates extra hurdles for the more reputable agents while not doing so for those who are most likely to be responsible for problems. The Association of Residential Letting Agents believes that the quickest and most effective method to eliminate unprofessional, unqualified and unethical agents from the rental market is through statutory provision via this amendment.
	There is currently no mandatory licensing scheme for letting agents or landlords in the UK despite 95 per cent of consumers believing that there should be. The Association of Residential Letting Agents introduced a licensing scheme for its members in May 2009 which ensures the highest standards of service for those who use members of the scheme. Its introduction was supported by a wide variety of organisations including Trading Standards, Shelter and the National Landlords Association. The scheme delivers higher standards of service for tenants by ensuring that licensed members abide by the relevant codes of practice and rules of conduct, hold recognised qualifications and are covered by professional indemnity insurance, a recognised client money protection scheme and an independent redress scheme. The licensing scheme has many other facets to improve service, such as ensuring that all members undertake at least 12 hours of continuing professional development each year.
	I do not regard this amendment as contentious. It seems eminently sensible because it is simply providing a means whereby statutory legislation can be introduced by giving the power to the Secretary of State to do so at some future date.
	Finally, Amendment 92 relates to a slightly different issue but it extends the courts' discretion to postpone or suspend the execution of possession orders in cases where there is no specific statutory power to do so. The problem is that Section 89 of the Housing Act 1980 severely restricted the power of the courts to suspend the effect of possession orders in cases where the courts had no specific statutory power to do so but had, to that point, relied on their general powers. The effect of this was that no possession order could ordinarily be suspended for longer than two weeks; in cases of exceptional hardship the court could suspend further, but only up to six weeks. The effect of this has been that an evicted tenant and his or her family are only permitted two, or at most six, weeks to find alternative accommodation whatever the circumstances of the family as regards, for example, size, medical or location needs or education.
	Even if those restrictions were realistic in 1980, they are now out of date, in view of the continued pressure on the availability of affordable housing, the recent reductions in the provision of housing benefit and the increase in the types of tenancy to which Section 89 applies since it was enacted. To find alternative accommodation within the timescale provided by the 1980 Act is virtually impossible, and has been for some time, yet the courts have no power to order more. This amendment would simply enable a court to exercise greater flexibility in considering the suspension of possession orders and to allow the appropriate length in the circumstances of the case, balancing the hardship to the tenant caused by the eviction against the landlord's need for the property. I beg to move.

Lord Whitty: My Lords, I support Amendment 92. Those of us who are looking at the housing market recognise that the role of the private rented sector is likely to increase and that there are serious problems with both quality and delivery within that sector. I am sorry I had to be out of the Chamber when Amendment 85, on the accreditation of private landlords, was debated. However, the vast majority of tenants and potential tenants will come across the property via an agent, and, as the noble Lord says, their actual arrangements for rent, repair and general customer service will be with the agent, not directly with the individual landlord. In those circumstances, the role of lettings agencies and management agencies is vital. Therefore, it is important that this Bill provides for some ability to set standards for them. As the noble Lord, Lord Shipley, said, it is very important that the professional trade bodies in that area-the National Landlords Association and the British Property Federation-support a degree of statutory intervention on this front for the very clear reason that good landlords, effective landlords and landlords concerned with service for tenants can get undercut by bodies that do not observe decent standards.
	The amendment is permissive on the Minister and clearly will be subject to some assessment of need. However, as the noble Lord says, if we do not provide for some ability to issue regulations in this area, then a whole sector of housing provision will remain unregulated, with the better agents in that area being undermined by the worse. I hope that the Minister can at least give a positive response to this amendment.

Baroness Gardner of Parkes: My Lords, I apologise for my delay in getting back to the Chamber. I had jobs that I simply had to do in the House.
	It is important to consider the impact of this in terms of the Delegated Powers and Regulatory Reform Committee, of which I am a member. I wonder whether these are the sort of powers that that committee is very opposed to giving, because they are too wide and would mean that the Government could do pretty well whatever they wanted. I have clear memories of, I believe, the Wilson Government introducing rent controls, which had a disastrous effect. They appeared to work temporarily but were a terrible failure after that. Everyone found that their rents jumped up terribly, which was worse than if they had increased gradually. I have reservations on those two grounds and should like the Minister to take them into consideration.

Lord Palmer of Childs Hill: My Lords, I shall speak to Amendment 93 which, for the accountants here, follows Amendments 91 and 92. Most of the points relating to the tenancy relations services dovetail clearly with the other two amendments in the group. Amendment 93 requires all local housing authorities to provide a tenancy relations service. This proposed new clause would establish a statutory duty on each local housing authority to provide such a service, and its focus would be to foster good practice in the private rented sector.
	The tenancy relations officer's work will include taking steps to promote awareness of rights and responsibilities on the part of both landlords and tenants; conciliation and negotiation between the parties in the interests of resolving disputes; and, where necessary, assisting in the enforcement of duties and in the prosecution of landlords for the criminal offences of harassment and illegal eviction. I received a helpful reply from the noble Baroness, Lady Hanham, about this point. The sum total from the Minister was that there is no need to legislate because local authorities already carry out such activities and duties.
	I am sad to say that not all local authorities do that. With the cuts that are taking place in local authorities at the moment, they will perform these even less if there is no statutory duty so to do. Within the private sector, it may surprise some noble Lords that there is harassment and illegal eviction. There is a need to protect tenants from criminal offences. The legislation for homeless persons in properties without protection is very strong.
	A tenancy relations service is needed. I shall give two examples from the past couple of weeks which occurred to me as a local councillor. A guy living in rented accommodation came to see me. He is being harassed by his landlord and it is a situation where one ethnic group is against another. He complained to the local authority and the police, both of whom told him to go away. There is no proof. I say to this man, "Go and find somewhere else to live. If it is that uncomfortable, it is probably insoluble". The guy cannot find somewhere else to live because he needs a deposit and a guarantee.
	The second case again took place in the past two weeks. A woman in this north-west London borough says that she cannot find a one-bedroom flat to rent because all landlords want a guarantee and a deposit, and they do not want her because she is on housing benefit. The idea that there is no need for a tenancy relations service is living in a bubble of Westminster which does not understand what happens in reality. Other legislation of this Parliament will put people into private accommodation without any choice and there will be a greater danger of tenants being put under intolerable pressure. Those people need a tenancy relations service which is statutory and not just voluntary. People go to their local housing association or local council but they are not helped if they are not a priority case and the council does not see a way to help them.
	The noble Baroness, Lady Hanham, said that there are Citizens Advice and various other organisations. At the moment, they are under extreme pressure. People are queuing up. The bureaux are not answering the telephone. They have service level agreements with their local authority. They are well meaning and they help, but I find that there are many people who they do not help. Therefore, I hope that the Minister will find a means of incorporating a tenancy relations service within the amended legislation, which would dovetail well with the comments made by my noble friend Lord Shipley.

Lord McKenzie of Luton: My Lords, perhaps I should start by declaring that I am a landlord of a property that is let through a letting agent in London, and it is in the register of interests. I shall take the amendments in reverse order.
	I have a great deal of sympathy with the thrust of Amendment 93, spoken to by the noble Lord, Lord Palmer, although I feel that it is overly prescriptive. No doubt in the private rented sector in particular there is enormous pressure, and we all know that that pressure is going to build and be exacerbated by what his Government are doing on housing benefit. It will put pressure on homelessness in that sector in particular. Of course there is bad practice, and we should support propositions which look to protect vulnerable tenants. He also made the excellent point that the organisations to which tenants traditionally may have looked, such as Citizens Advice, are under pressure because of funding.
	Again, I have great sympathy with Amendment 92, but I would like to read the technicalities a bit better. The thrust of it is that it would give the courts some added leeway before actual possession is obtained. In the current climate, if people are being thrown out of their properties, that must be something which should gain our support.
	On Amendment 91, I believe that just before we left Government, we did have proposals coming forward to do just what the amendment is seeking. The noble Lord may say that we took too long to get it done, but again I support regulation. It is interesting to note that good providers in the field, the good letting agents, also support this. They know that their reputations can be tarnished by bad practice out there and that they can be undercut by unscrupulous letting agents. We need some proper regulation in this sector.
	I am therefore broadly supportive of the thrust of all these amendments. However, given where we are with the Bill, at the Report stage and just about to move out of the housing environment, it will not be until Third Reading that we get to this. I do not know what the Minister will be able to say in winding up the debate that will give us any assurance about progress, but along with the proposers of these amendments, we would like to see progress on all three fronts.

Lord Taylor of Goss Moor: I rise to speak very briefly. I suspect that for all sorts of reasons Ministers are going to be reluctant to go down the regulatory route and indeed that, while my memory may fail me on this, I had thought that the previous Government ultimately came to that conclusion as well, although they certainly investigated the possibility of taking it. However, I may be wrong. I just want to throw into the discussion that in the absence of regulation we must recognise the absolutely fundamental role the private sector will have in housing all sorts of vulnerable people because there are not enough houses in the social and affordable sectors. Furthermore, these people are often at the lowest end of the private sector market and, in those circumstances, they are very vulnerable. It seems that an opportunity has been consistently missed over the years to reward those landlords in the private sector who behave best and, indeed, to encourage landlords in the private sector to do some of the things associated with social housing.
	For example, there is no recognition in the rents that are available through housing benefit if landlords are willing to give longer tenancies, and there is little likelihood of recognition of relative quality. I have never understood why we would allow payments through the state in terms of housing benefit to the worst landlords offering the meanest opportunities and yet do nothing to reward those who behave better. That reward could involve a voluntary system of signing up to charters. In particular there is an issue for tenants in this sector over lack of security. Tenants in the private sector may be elderly and have lived long periods in a house, or they may be people with young children, and yet they may not have any real security in the tenancy. It would encourage landlords to offer security if we were to reward longer periods of tenancy and if we were not to draw such a sharp line that says a brief tenancy gives the landlord the security of being able to get the property back or the tenants become secure and highly protected. Why cannot we have something in between and why cannot we reward landlords for such behaviour? I think the Minister is going to be averse to regulation but perhaps he will be a little bit more supportive of an approach that uses the carrot rather than the stick.

Lord Taylor of Holbeach: My Lords, my namesake reads the situation pretty well and makes a very thoughtful contribution, as he always does on housing matters, rural housing in particular. It has been a very useful debate. In principle we have discovered the difficulties of an imperfect world where not everybody behaves as they should. I am delighted that the noble Lord, Lord McKenzie, did not get hissed at when he declared his interest as a landlord because it is important that landlords are recognised as having an important part to play. Many of the amendments introduced by my noble friend are directed at encouraging landlords to maintain high standards. The question is whether regulation is the way to deal with this problem, particularly given the need not only to deal with the current situation but to plan and develop this sector for the future, because we all know that it is an area which will need considerable investment.
	Amendment 91 makes proposals for the regulation of letting and management agencies. The noble Lord, Lord Whitty, said he was going to speak to Amendment 92 but he meant Amendment 91 because that is what he spoke to. Around two-thirds of landlords let and manage their property through an agent so it is important that they can rely on a good service. We are aware of poor practice within the letting and management agent sector but regulation already exists in this area. Between a third and a half of all agents belong to voluntary schemes which set standards and offer redress when things go wrong, including client money protection. Unfortunately, far too few consumers of the agency system-both landlords and tenants-are aware of the risks of using an unregulated agent. I am delighted that the Government have been able to endorse the Safe Agent Fully Endorsed scheme-SAFE-recently launched by the industry which highlights a key risk around clients' money. We want to explore these voluntary approaches further before a move to statutory regulation but we do not rule this out in the longer term. However, we cannot support the introduction of enabling powers where we have no plans for their use.
	Amendment 92 in this group would extend the court's discretion to postpone awarding possession of dwellings. We do not think this is necessary. We estimate that, even using an accelerated procedure available under the legislation, gaining possession through the courts takes at least six months. That is more than enough time for a tenant to find alternative accommodation and it already places a significant burden on landlords, particularly in cases where rent arrears are accumulating.
	On Amendment 93, my noble friend Lord Palmer joined my noble friend Lord Shipley in presenting the argument for local authorities' tenancy relations services. We agree that both landlords and tenants in the private sector should have access to advice and support, but local authorities already provide such advice through their housing options services. This advice is supplemented by existing powers to deal with poor practices by landlords. We therefore see no need to legislate further. New legislation would have the effect of restricting local authorities in their existing work and quite possibly add burdens simply in order to reinforce what is already there.
	All the amendments pursue a proper ambition: to raise the standard in the industry. In the case of letting and management agents, we acknowledge that some bad practice exists. I have considerable sympathy with those who have been caught out by bad practice, but for the reasons that I have set out we do not think that regulation now is the right answer. Therefore, I ask my noble friends not to press their amendments.

Lord Shipley: I thank my noble friend the Minister for his response. In respect of Amendment 93 and tenancy relations services, the situation is getting more difficult. There are reductions in spending on tenancy relations. The Minister is right that the amendments are part of a general picture of trying to maintain standards. Where do people who have problems in the private rented sector go? If tenancy relations services are closed down or reduced in scale, and if the CAB has increasing problems in delivering the standards and levels of support that it would like to deliver, it makes it difficult to see how people will get the support they need. That means then that the Government's objective of ensuring fit accommodation is also more difficult to achieve.
	I have noted what the Minister said about Amendment 92. We will look further at that and may raise the issue again. As he rightly identified, it is an issue for the courts.
	The intention of Amendment 91 was to enable the Government to do something about it. However, if we are going to explore making the voluntary approaches better, and if we have not ruled out introducing statutory powers, I am content for the moment to work with that, but we are likely to find an increasing need to move down the statutory regulatory route. With those provisos, I beg leave to withdraw the amendment.
	Amendment 91 withdrawn.
	Amendments 92 and 93 not moved.
	Amendment 94
	 Moved by Lord Palmer of Childs Hill
	94: After Clause 174, insert the following new Clause-
	"Establishment of London Housing and Regeneration Board
	(1) The authority must establish a London Housing and Regeneration Board ("the Board").
	(2) The Board is to consist of such numbers (being not less than six) as the authority may from time to time appoint.
	(3) The authority must appoint one of the members as the chair of the Board.
	(4) In appointing a person to be a member the authority-
	(a) must have regard to the desirability of appointing a person who has experience of, and shown some capacity in, a matter relevant to the exercise of the functions set out in this Chapter,
	(b) must be satisfied that the person will have no financial or other interest likely to affect prejudicially the exercise of the person's functions as a member, and
	(c) must ensure that an appropriate number of members on the Board are appointed representatives of London boroughs.
	(5) In exercising its housing and regeneration functions and powers subsequent to the enactment of this Chapter, the authority must consult and obtain agreement from the Board."

Lord Palmer of Childs Hill: The amendment is about establishing a strategic board in London. Noble Lords may say that there is already such a proposal and there is no need, but it is not in statute.
	Ahead of the Localism Bill being drafted last year, London Councils and the GLA submitted a joint document to the DCLG clearly stating issues where there was an agreement between the two organisations. One such area of agreement between them was on how housing and regeneration should be run and managed efficiently and effectively. The agreement very sensibly stated that,
	"There should be a decision-making board comprising the Mayor, three borough representatives and three Mayoral appointees".
	As the noble Baroness, Lady Hanham, pointed out to me, this is indeed what has happened. However, the expectation-certainly from London Councils and, I assume, the GLA-was that this would be included in the Bill before us, and we do not know why it is not. I feel that it is important that the housing and regeneration board is set up in statute. Accepting the current agreed workings between London Councils and the GLA, I think that people want the security of knowing that a future Mayor of London, of whatever colour, will abide by something which is enshrined in statute and is not just in place through mutual friendly agreement.
	One such recent example is the London Waste and Recycling Board, which was set up under primary legislation. The setting up of this board was prescribed in the Greater London Authority Act 2007 and was supported, as is the current example, by both London Councils and the GLA. This Government also supported that provision in the GLA Act just four years ago.
	The two authorities with responsibility in this area have stated what they want, and they want it in primary legislation. The Government are quite happy for there to be such a board, although off the face of the balance sheet, but why should it not be set out in primary legislation? The Bill is about localism, and the localism element here is that all 32 London boroughs feel that their representation on the London strategic board should be set out in primary legislation and not be there through the good will of the mayor, whoever he or she may be.

Lord Jenkin of Roding: My Lords, this is the first time that I have addressed the House at the Report stage of this Bill. I have not taken part on the housing part of the Bill hitherto for one very good reason. It is exactly 50 years since I became the chairman of the housing committee of Hornsea Borough Council, and there has been an astonishing amount of change in that 50 years. Over the past two days I have learnt a very great deal about the current state of housing and the institutional framework in which housing in this country is currently run and managed. We all know that there is a huge shortage-perhaps more in London than in other parts of the country-and of course measures are in hand to deal with that.
	I should immediately declare an interest, as I did in Committee. I am a president of London Councils and a vice-president of the Local Government Association.
	The noble Lord, Lord Palmer, has made the case for putting the housing and regeneration board for London on to a statutory basis. The question here is of the long-term security of the existence of an institution. As my noble friend said in response on this matter, and as was set out in the Government's response to the amendments that were withdrawn at the end of Committee, the question is why you need to put this on a statutory basis when the Greater London Assembly, the mayor and London Councils have been able to agree it without a statutory basis. They say that putting it on a statutory basis would make it less flexible. However, the central point is that they asked for this. The mayor, the Assembly and London Councils all asked for it to be put on a statutory basis. Everything else that they asked for when they wrote to my right honourable friend last year-the end of the London Development Agency, the setting up of the Homes and Communities Agency and so on-has all happened; that is in the Bill. One thing that has not happened is putting this housing and regeneration board on to a statutory basis.
	When really responsible democratic bodies such as the mayor, the Assembly and London Councils ask the Government to provide some stability and security for the arrangement that they have made, it is a little impertinent-if I may put it that way-for the Government to say, "No, we are not going to do this. We don't think you should have it. You don't know what you want", or whatever it is. There is a strong case here for putting this on an effective statutory basis.
	The amendment has been supported by Members of all parties in the House. All right, I am on record as having said that we must have much less bureaucracy etc. in the Bill. Happily, we are on the path to getting some of that. I had a nice birthday present of an e-mail from one of my noble friend's officials this evening and I am extremely hopeful. This is not adding new bureaucracy. It makes an existing arrangement, set up voluntarily by democratic bodies, a statutory body and gives it and all those who will work with it the security that that would imply.
	My noble friend Lord Palmer of Childs Hill has made a strong case, supported by the noble Lord, Lord McKenzie, and, from the government Back Benches, me. I hope that my noble friends will now be able to think again.

Lord McKenzie of Luton: My Lords, I can be extremely brief. As the noble Lord, Lord Jenkin, indicated, we have put our name to the amendment and support it for the reasons that have been advanced by the noble Lords, Lord Palmer and Lord Jenkin. It is about getting long-term security of what has been agreed and what is seemingly in place into primary legislation. I am bound to say that we do not expect that Ken would overturn these arrangements any time soon. I can well understand that people may want security just in case it might cross his mind.
	It is good to hear the noble Lord, Lord Jenkin, again in our debates. His long-standing engagement with housing in Luton under the old system was seen as one of the more important committees. It was 10 years before I was allowed on it. He has a great deal more experience than I do. I support the amendments and urge the Government to take it forward. We do not need to be apart on this. There is agreement on what is happening. It is the right thing to do.

Baroness Hanham: My Lords, I thank all noble Lords who have participated in this. One of the most enlightening things that we have heard today is that the noble Lord, Lord Jenkin, took up the Housing Committee at the age of 35, as he has admitted that it was exactly 50 years ago and we know that today is his birthday. On behalf of the House we wish him a very happy birthday. Patrick, thank you for all that you do and the contribution that you make.

Noble Lords: Hear, hear.

Baroness Hanham: My Lords, this is important. We do not believe that it is necessary to prescribe in statute the requirement on the Greater London Authority to establish a London housing and regeneration board. The letter of July 2010, to which others have referred, assumed a decision-making board. However, there were concerns over accountability. I will come further on to that.
	The noble Lord, Lord Palmer, put the case very well. For the benefit of noble Lords who might not have picked up the letter that I wrote following the withdrawal of the amendments last time, I should say that we believe that setting a board in statute would give London minimal flexibility in determining its own arrangements for governing housing and regeneration activities. We want to keep prescription by central government to a minimum and ensure that the Greater London Authority is free to respond to changing times and circumstances without having to resort to changing primary legislation to do so.
	The Mayor of London, the Assembly and London Councils are already deciding how they want to run things. They are already in the process of change, without any input from the Government. They are able to set up a board structure such as the amendment suggests-should they want to. They do not have to wait for us to tell them how to do it, they can do it themselves. I think that is one of the main reasons why we do not particularly want to put this on to the statute book. They can do it, they are able to do it, so there is no reason to tell them to do it, and they do do it.
	A decision-making board will ultimately determine the GLA's housing and regeneration activities, but the GLA was created on a model of a democratically elected executive mayor to provide strong leadership and do things on behalf of London. Therefore it is important that the mayor has the final decision on housing and regeneration matters, but he has to take into account the views of the boroughs as well. Of course, the checks and balances on the mayor should remain with the London Assembly, which is there to hold the mayor to account.
	We do not think that it is a good thing to put the mayor in the position of having to have a board. We are absolutely clear that he is working very co-operatively with London Councils and the local government group. Therefore I think that we would resist very much putting that on to the face of the Bill. In light of what I said in my letter and what I have said today, I ask the noble Lord, Lord Palmer, to withdraw his Amendment.

Lord Palmer of Childs Hill: My Lords, my noble friend Lady Hanham makes my points for me. She points out that the GLA and the mayor will evolve; things will happen. That is exactly what frightens me. Under whichever mayor, of whichever colour, whether it is next year, four years hence or eight years hence, as the Minister says, the GLA can evolve and change, and that is its virtue. In fact, it is the opposite. What we are trying to do is to enshrine in primary legislation a protection for the 32 London boroughs and for the GLA, a partnership of which we all approve, rather than rely on the good will and resolve of the mayor of the time, whenever that may be. The idea that it should evolve, put forward by the Minister, makes the case for it being in primary legislation. However, at this stage, with the mass of people in this place having tested the water, I beg leave to withdraw the Amendment.
	Amendment 94 withdrawn.
	Consideration on Report adjourned.

House adjourned at 9.58 pm.
	Correction
	In col. 128 of yesterday's Official Report, in the debate on the Equality Act 2010 (Specific Duties) Regulations 2011, the contribution made by Lord Renton of Mount Harry was mistakenly attributed to Lord Eden of Winton.
	In the report of yesterday's Grand Committee on the Armed Forces Bill, at col. GC40, the speech made by Viscount Brookeborough was mistakenly attributed to Baroness Lister of Burtersett.